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To: Boplicity who wrote (11232)	3/6/2001 4:08:48 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 13572

Greg, Yo Ray, lets hear it. Ray, what's your take on STOR? I need someone to smash my rose colored glasses. I'm having a relapse into the fear that this market is going to get away from me..... Hehe. Then I get back to reality. I read the news.... there is none, and watch the money flow and realize we simply are witnessing a pause in block sales. As far as STOR is concerned, the good news is that they have some very good companies that they interact with: oni.com Their website indicates a very healthy stable of strategic partners. I like that. :) From what little I've investigated STOR, one problem comes in with the customer base. I seem to recall that one of their big customers is intended to be YHOO, which gives away the storage to email users for free. Great business model, that. Maybe a little bit of a tarnished tale, except through rubicund specula. I'm just now reviewing the SEC Form 424B3 that STOR filed on 11.22.2000. Interestingly, STOR seems to be in some sort of litigation with its principal customer, EMC. I've no idea if this is a matter of concern or not. It is a bit off-putting, at least superficially, which, as you well know, is a special level of analysis I engage in frequently. During the nine-month period ended September 30, 2000, we earnedapproximately 24% of our total revenues by providing professional services to customers of EMC Corporation pursuant to a subcontractor agreement with EMC. We expect that the percentage of revenues we derive from professional services will decline and that the percentage of our revenues we derive from managed storage services will increase significantly and during 2001 will represent more than 75% of our total revenues. However, if we experience a decrease in revenues from professional services, through the termination of our agreement with EMC or otherwise, our total revenues may significantly decrease and our quarterly results in the near future would be harmed. Since June 2000, when EMC made the allegations against us described below, we and EMC have entered into fewer new professional services engagements, and we expect the number of new engagements to continue to decline. Any ideas where this is headed? As far as the financials go, I'd prefer to see them at least cashflow positive. STOR is just another all to typical example of a company brought to market way before it's time. You are taking on VC risks in this one. Here's an interesting fact that few of today's retail investors are aware of. As everyone knows, the recent trend in IPOs has been to get them out of the chute way before the companies are mature enough to be generating operating cash flows, let alone profits. In contradistinction, I recall my brother-in-laws company being brought out into the public markets in 1983. His company, ACIX (long gone, now a subsidiary of Qwest), was a pioneer in the field of ATMs. Automated Teller Machines and not Asynchronous Transfer Mode equipment. When they approached the underwriters the rule on Wall Street was that any company attempting to go public had to have at least $10MM in annual revenue, had to be profitable for 3-4 prior quarters, had to have at least 100 employees and had to have a reasonable prospect of stability. Compare that to the coterie of wimpy, unprofitable "story" stocks that were foisted on the public in the last 3 years and you can see why a seasoned investor has to be a skeptic about the dramatic lowering of standards on the Street. When I look at STOR, I ask the basic questions first. What is the unique IPR story here? I see none. Are they providing a service at a bottleneck that no other company can provide? No. Do they have the potential to be (cliche alert) a "gorilla"? No. With really great companies like INTC, CSCO, JDSU and EMC (as examples) selling off to about the somewhat the same extent as STOR, I'd have to question a strategy for a LTB&H type investor to play in the second tier. Great investments are ones that are made in great companies at the early days. Where's the greatness to STOR? I'm not sure I've been told why their story is unique or compelling. JMHO, Ray :)