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To: pater tenebrarum who wrote (26476)	10/10/2000 5:32:46 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 436258

It is a Paul Berliner pick. He now has a web-site where does frequent updates. I find this guy to be the most consistent short-picker on SI. Here is what he has to say on CMVT: 4. CMVT - Comverse Technology. Flagged by us since 5/1/00. Great company, great products, great management, hot industry. So what's the problem? Telecom systems & software provider CMVT is raking in big tax benefits from Efrat Future Technology, a unit of its Israel-based Comverse Network Systems subsidiary. Check out CMVT's tax rate - why is it so low? The company's tax rate fluctuates around 10% instead of around 40% for all other companies because EFT enables CMVT to get favorable tax treatment under a tired old Israeli law that grants tremendous tax benefits to small, emerging growth companies with qualified operations in the Holy Land. This might have been fine for CMVT four years ago or even three years ago, but the company is now very large and technically no longer qualifies for the favorable tax treatment, which was inacted strictly to benefit small companies. CMVT has since been added to the S&P 500! AND IT IS NOW BASED STATESIDE! When the snoozing IRS catches wind of this, CMVT will be taxed just as any other company, at around 40%. Should this all pan out as we expect, CMVT will undergo a sharp markdown to a price more reflective of its true earnings capabilities. We may have to wait a while for this situation to unfold, though. The Company recently hinted that the low tax rate status may expire in its next fiscal year.

To: pater tenebrarum who wrote (26476)	10/10/2000 5:33:16 PM
From: Cynic 2005	Respond to of 436258

It is a Paul Berliner pick. He now has a web-site where does frequent updates. I find this guy to be the most consistent short-picker on SI. I bought some puts on this last week when the stock was over 100. Here is what he has to say on CMVT: CMVT - Comverse Technology. Flagged by us since 5/1/00. Great company, great products, great management, hot industry. So what's the problem? Telecom systems & software provider CMVT is raking in big tax benefits from Efrat Future Technology, a unit of its Israel-based Comverse Network Systems subsidiary. Check out CMVT's tax rate - why is it so low? The company's tax rate fluctuates around 10% instead of around 40% for all other companies because EFT enables CMVT to get favorable tax treatment under a tired old Israeli law that grants tremendous tax benefits to small, emerging growth companies with qualified operations in the Holy Land. This might have been fine for CMVT four years ago or even three years ago, but the company is now very large and technically no longer qualifies for the favorable tax treatment, which was inacted strictly to benefit small companies. CMVT has since been added to the S&P 500! AND IT IS NOW BASED STATESIDE! When the snoozing IRS catches wind of this, CMVT will be taxed just as any other company, at around 40%. Should this all pan out as we expect, CMVT will undergo a sharp markdown to a price more reflective of its true earnings capabilities. We may have to wait a while for this situation to unfold, though. The Company recently hinted that the low tax rate status may expire in its next fiscal year.