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Technology Stocks : PROGRAMMER'S PARADISE (PROG) -- Ignore unavailable to you. Want to Upgrade?

To: Carl R. who wrote (2223)	8/5/2000 7:12:51 PM
From: Carl R.	Respond to of 2383

Another look at the "cash suckers": PSR WC/sh Bk/sh EPS OUT Stk EGGS .19 .63 1.28 (.44) 1.4 2.38 FATB .92 1.47 1.85 (1.00) 1.8 4.38 ITRA 1.17 .84 1.56 (.46) 1.8 7.38 DRIV 1.05 .89 3.12 (.39) 2.3 6.00 BYND .35 .69 2.19 (.29) 2.4 1.13 BUYX .62 .86 1.41 (.26) 3.3 3.66 COOL .43 1.52 1.85 (.26) 5.8 3.91 PROG .09 2.72 7.63 (.16) 17.0 3.75 PROG-2 .28 4.51 7.63 3.75 PSR=Price/sales ratio (based on most recent quarter*4) WC/Sh=Working Capital per share Bk/Sh=Book Value per share EPS=EPS for most recent quarter excluding amortization OUT=Quarters until working capital is exhausted stk=Stock price PROG-2 is PROG after sale of European operations As you can see from this chart, the situation for many of these companies should start getting really interesting in the next 30 days. My guess is that many or most of these will be forced to sell out to one of the big players (i.e. CDWC, PCCC, or NSIT). We may also see some mergers of the weaker players combined with layoffs as they attempt to stem the losses, but with margins at 5-8% mergers won't help them much. I doubt that the weak players will get a premium over the current price as they will be forced to sell, but the acquisition of these sites could be quite useful for the big players with an efficient distribution system. I estimate that PROG will have a post-sale working capital of about $4.50. If they can sell the domestic operation for another $15 million, and they can get $5 million for their interests in PC-Ware and Healy-Hudson, then the breakup value of PROG is about $8.50. I wouldn't be surprised if that is where we are headed, either. Carl