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Technology Stocks : S1: Doing Business in a Dot Com Depression, -V1 -- Ignore unavailable to you. Want to Upgrade?

To: jlib who wrote (917)	12/11/2000 10:25:05 PM
From: AugustWest	Read Replies (1) \| Respond to of 1013

Has the title of this thread been changed?<eom>

To: jlib who wrote (917)	12/12/2000 12:57:12 AM
From: Oeconomicus	Read Replies (1) \| Respond to of 1013

Jimmy, your list only shows how misleading such simplistic computer screens of financial data can be. They obviously took the net loss for the first 3 qtrs of this year and compared it to the 9/30 cash balances, screening, in all likelihood, the entire Russell list. You link was the result of that screen (which, also obviously, was published without any fact checking). Such a computer screen would be fine if accounting net losses bore any relation to cash flow (or if they had simply screened using cash flow instead of net income). Alas, they don't and they didn't. Clearly, a manual recount is required. ;-) In the first 9 months of 2000, S1 booked a net loss of $6.77, but burned only 85 cents per share (EBITDA per share). Comparing those numbers to the 9/30 cash per share of $3.95 shows how choosing the wrong measure can lead to a dramatic, but wrong conclusion. Perhaps the drama was what that Web site was going for. Looking a little deeper into S1's numbers, by the way, you will find that, before adjusting for for the cash flow benefits of the V1 spinoff, S1 was projected by WR Hambrecht to burn only 42 cents per share from 9/30/00 to 3/31/01, two weeks after it is supposed to be dead. I'm not sure how a company drops dead with over $3.50 per share in cash (that's almost $200 million, BTW). For all of 2001, again before adjusting for V1, S1 is expected to show an EBITDA loss of 39 cents per share, breaking even in Q4. Q3 2001's projected loss of 7 cents per share or $4.1 million is less than V1's most recent quarterly loss, so it is not a stretch to think that the spinoff could pull breakeven back into Q3. WR Hambrecht's analysts go on to suggest that other sales (or spinoffs) of non-core units (some of the FICS products, for example) could improve the burn rate by at least $20 million in 2001, pulling breakeven back to Q2. But wait - aren't they supposed to be dead by then? I think not. Bob