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Technology Stocks : CrossKeys Systems Corp [CKEY and CKY/TSE] -- Ignore unavailable to you. Want to Upgrade?

To: bbgold who wrote (767)	12/5/2000 1:33:33 PM
From: Francois Lavoie	Read Replies (1) \| Respond to of 792

Value... I sold because they made 4 M Revenue compared to 17 M estimate. That's about a quarter of the estimate !!! Now, the stock will suffer because the fundamentals are not very good. They definitely lost my confidence, so I'm not going far by saying they lost investors confidence in general. The "deals not closed in time" excuse was used in Q1 as well. Back then the stock tanked from the 20s to the 10s. Now it's from the 10s to the 2s... Now if we want to do some fundamental analysis of this company (I didn't listen to the call): -They probably will layoff (why does it sound like Corel) -They have to do more financing which will dilute shares (Hey, still sounds like Corel !) -Management lost investors confidence -I should base revenue projections based on 4 similar Qs = 4 times Q2 = 16-20 M in rev. for the next year. -Book value = ? Cash is nil (they will run out of) According to Yahoo, book value is 1.81$ US. No P/E, No PEG, P/S = 1.22$ US * 19 M shares / 20 M rev. estimate = 1.16 So the stock is trading below book value at about 1 time sales. It might be fairly priced, but I'm not ready mentally to come back in. Contrarian views out there ? Francois

To: bbgold who wrote (767)	1/10/2001 9:57:22 AM
From: Francois Lavoie	Read Replies (1) \| Respond to of 792

bbgold, Got back in this morning. I'm in for buyout speculation. Cheers, Francois CrossKeys in discussions with UK telecom firm By Jeff Jedras, Ottawa Business Journal CrossKeys Systems is in discussions with a number of telecommunications companies regarding a possible sale or strategic partnership with the Ottawa company and may be close to a sale. The Ottawa Business Journal has learned that CrossKeys is in discussions with Orchestream PLC, a UK-based developer of software for activating services on, and enhancing the performance of, Internet Protocol (IP) networks, regarding the purchase of CrossKeys. The two companies have worked together in the past, signing a software partnership in March 2000 to automate delivery of IP services such as intranet and extranet virtual private networks, voice over IP and hosted application services. Orchestream was also mentioned by CrossKeys chair Terry Matthews at a company staff meeting Jan. 4 as a possible suitor for CrossKeys, either as a buyer or a strategic partner. CrossKeys retained CIBC World Markets Dec. 13 to "identify and evaluate strategic alternatives to enhance shareholder value," which is corporate language for the company gearing up for a possible sale. CrossKeys spokesman John Blackmore says the company is looking at a number of potential firms that might have an interest in the company, but he cannot comment on specific names. "We wouldn't have any comment on that," says Blackmore. "When we announced we're working with CIBC World Markets a number of companies expressed an interest, and so we're engaged with those discussions." Blackmore also denied a sale to Orchestream, or any company, is imminent. "We're not in an position to say," said Blackmore. "As soon as we have information that the market should be hearing, we will definitely be communicating that in a timely fashion." Bert Powell, a research analyst following CrossKeys for BMO Nesbitt Burns, says he's heard Orchestream and CrossKeys mentioned together in the past but not recently, and not in the context of a sale. "It would seem possible, sure," says Powell. "I know CrossKeys is looking at alternatives, and I would assume those alternatives would include the exploration of a sale, but I don't know (anything) specifically." Powell says that Orchestream is the type of company that would be interested in acquiring CrossKeys. "Another OSS company would be a logical candidate, but it's tough to say," says Powell. "It's going to be someone in the telecommunications field, whether that's a equipment vendor or a software company (I don't know)." The trouble for CrossKeys began on Dec. 4, when the company released an earnings warning, telling investors it could lose as much as $20.5 million, or $1.07 a share, in the quarter because of a failure to close key contracts. The company also said it was facing a serious cash crunch. The company announced it was retaining CIBC World Markets Dec. 13, and the next day Matthews gave the company some time to look at its options by issuing CrossKeys an $8 million credit facility, with the company inviting other shareholders to lend up to an additional $8 million under the same conditions as Matthews. CrossKeys unveiled a restructuring plan, which including laying off 75 people, or about 23% of its employees, at a staff meeting Jan. 4. The company also reduced its slate of VPs to four, announcing that veteran VP Engineering Ella Mar and VP Sales Hugh Brownlee would be leaving the company.