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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: torquatus who wrote (14377)	11/5/2000 4:27:40 PM
From: RockyBalboa	Respond to of 18998

Found this on HLYW, thestreet.com Blink! What Has Happened to Hollywood Video? By Herb Greenberg Senior Columnist Originally posted at 8:21 AM ET 11/3/00 on RealMoney.com Note to me: Kick yourself for dropping the ball on onetime highflier Hollywood Entertainment (HLYW:Nasdaq - news), which is now trading at less than $3. Raised a bunch of red flags on problems there way back when. Perhaps the biggest, noted here last September, when Hollywood reportedly was talking merger with Blockbuster (BBI:NYSE - news), was that CEO Mark Wattles had stopped living full time near the company's Portland, Ore., headquarters and instead was spending much of his time at a house he had bought in Las Vegas. Now hear this: Not only has the COO quit, and not only did the company recently report that its third quarter would fall short of analyst estimates but the company is also facing a debt crisis. In fact, one reason it missed earnings, it claimed, was that interest expenses were high. And no wonder: As of the end of June, the company was just about maxed out on its $300 million credit line. Making matters worse, in December, according to its latest 10-Q, the first of several $37.5 million in debt payments will be due, and as of the second quarter the company only had $4.4 million cash. (It would've had more but in May the company, already tight for cash, gave Wattles a five-year, $15 million loan.) The company has said that it plans to pay down the debt from internally generated cash flow and a cutback in capital spending. And it expects the fourth quarter to be a, uh, blockbuster. But will it be good enough to bail out Hollywood? Tune in next quarter for the answer. ... Oh, my aching stock: I still can't get over how it's like the past three weeks -- no, make that past seven months -- never occurred, and high short-interest stocks are once again being gamed. Any bets that margin is going back up?! ... From Carter D., on the prospects for success of Reg FD, the SEC regulation mandating fair disclosure: "I think the interesting market test will be if we no longer see stocks 'mysteriously' move one way or another prior to an event." Can't disagree! But like I said in the Columnist Conversation Thursday, if the government were really serious, it would ban breakout sessions at investment conferences that are closed to the press (which pretty much covers all of them!). The rule now is that nothing material can be disclosed at breakouts. Other than the investors in attendance, who will know?! And those investors will quietly go back to their turrets and make the appropriate trade in response. ... Recent items here (and here ) pointed out how short-sellers believe the stocks of AstroPower (APWR:Nasdaq - news) and Yankee Candle (YCC:NYSE - news) are headed much lower. I now see that before my columns, analyst Howard Rosencrans of H.D. Brous & Co. (I like to call him the original Iomega (IOM:NYSE - news) bull, because he was very right on Iomega's stock) issued sell recommendations on both companies through its Red Flag Alert. His target on Yankee, which closed Thursday at $14.06, is $10; he has the same target for AstroPower, which closed Thursday at $41.88. ... And this note to all of you knuckleheads who say I'll be eating my words on Read-Rite (RDRT:Nasdaq - news): Hey, go back and read what I wrote when I noted -- after the stock had fallen by about 47% from where it was when I first mentioned it -- that I should've stayed out of the way on that one. (At least from a timing standpoint, as it applied to the optical bubble! But who was to know?!) I also said that the company may very well do fine on its fundamentals, but the money manager who liked it so much had sold his stock and bought calls. Lots of folks are dealing with potentially volatile stocks that way in this market. Or so they tell me. -------------------------------------------------------------------------------- Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to Herb Greenberg . Greenberg also writes a monthly column for Fortune. Brian Harris assisted with the reporting of this column. -------------------------------------------------------------------------------- Send letters to the editor to letters@thestreet.com. Read our conflicts and disclosure policy. Order reprints of TSC articles. Top