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To: Glenn Petersen who wrote (72)	4/18/2001 6:05:49 PM
From: Danny	Read Replies (1) \| Respond to of 136

Glen: LDCL is a black horse with high degree of risk. However, i think here are some things people are concerned when evaluating LDCL: 1:) They have only 4.9M in revenue and 190M loss. The most talked about 4.9M number is the first 6 months operation revenue from LDCL. It is very typical for any company to have small to zero revenue in first serveral months after the establishment. In fact, the revenue number in Q4 is 8.9M, almost doubled what they had for the first 2-3 quarters combined. Moreover, the 120M booking they have for the next 18 months comes mostly from bluechip companies like NKE, Ford, BlockBuster, etc, who have very low risk of backing off from the contract and has ZERO risk of running out of money:) Let's say LDCL can only get 100M in the next 18 months. That put them around 66M revenue for this fiscal year. Plus, they have got to sign up new customers in the next 9 months, so, I think 60-70M should be a good lower bound for them in this fiscal year. Now, 70M is not a not, but neither is $280M market cap when LDCL was at 4. When you add up all these together, LDCL is actually pretty fairly to under valued at 4. 2:) Now, let's look at loss. First that 190M loss is not all operational loss. Most of that belongs to stock option program. Second, LDCL is not in the selling a dollar for 85 cents business. Their business model requires substaintial initial investment, but the profit margin will improve as long as their customers stay with as the recurring cost is very insignificant compared to the initial cost. I think at least so far LDCL is moving to the right direction. Sure they still have some shitty dot-coms in their customer list. But the new customers they signed up are almost exclusively big deep-pocket names. This will help LDCL to improve their profit margin in the long term. 3:) Everyone seems to forget the market itself was simply going through the last stage of the biggest bear market in NASDAQ. People were panic and stocks were dumping cheap. We may or may not see the bottom already, but I say we were close to the bottom when NASDAQ was 1600 2 weeks ago. All in all, I think LDCL is certainly a riskly investment but with a good shot. If they can weather this market storm and keep expanding their customer base, two to three years later, I am not suprised at all to see LDCL to touch 15-20 range. Not bad at all if you get in at 4.