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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Anthony@Pacific who wrote (70737)	4/26/2001 9:36:49 AM
From: Ray Rueb	Read Replies (4) \| Respond to of 122087

Just the facts man... Tony you say "There is not one false fact in the report". I say: Yes, there is. Actually there are (plural). You quote Ms Moore as saying: "doubling or an almost double of their subscribers in their very next earnings release" AND you state that this information was not disclosed to the public prior to earnings release. But it was disclosed. You yourself alluded to the subscription information disclosure months ago when you were commenting on the move.com acquisition from Cendant. You said something like (my words here, but there is your original posting) ...this takes HOMS closer to the theoretical maximum number of subscribers and therefore limits their growth potential... But the real issue is your conclusions from the facts. You need to take a course in basic logic. If all dogs I see today are dalmations, it does not necessarily mean that all dogs are dalmations. If merely implies that all dogs COULD be dalmations. And simple research confirms that, in fact, all dogs are not dalmations. Relating that analagy back to your statement of "If the answer is NO, then our position is valid and you are dead wrong" is flawed logic. Your position is not valid. I don't know much about how big companies like HOMS do this sort of thing, but I believe it is customary to ANNOUNCE contracts when they are signed and RECOGNIZE revenue when you've EARNED it. Isn't that what Microstrategy got burned for? Recognizing revenue before it was earned? It sounds prudent of a company like HOMS to have announced contracts (since it will materially affect future earnings, aren't they REQUIRED to disclose this?) and to NOT have recognized earnings? I have absolutely no knowledge of how HOMS processes newly acquired realtor subscriptions, but I would imagine that there is substantial effort involved. I believe HOMS needs to recognize the revenue in the same quarter as the effort don't they? If HOMS actually DOUBLED its subscriber base in one quarter, maybe there is more than one quarter's worth of effort before they can recognize the revenue. I don't know. What I really can't figure out is why this is a bad thing in your mind. Could it be that HOMS earned $100 million in revenue without recognizing the additional subscription revenue and that maybe NEXT quarter will be even better (what with all that new revenue kicking in)? Maybe this hangs like a sword over a short position. But the only way I can imagine that you can come to this conclusion on such incomplete information is to use flawed logic. I believe HOMS is acting properly (and therefore), maybe they know more about running their company than you do. I told you before (actually I felt like I was warning you since you are short the stock) that these guys have a high level of integrity and a good business plan. Do I need to remind everyone about your past and your historical level of integrity? In your defense though, I will say that "past performance is not necessarily a good indicator of your future performance". I believe ALL your conclusions about HOMS are deeply suspect. Furthermore, I believe the more "research" you publish (in order to "prove" your thesis), the more you will in reality prove mine (again, my thesis is that you use flawed logic and seriously incomplete information to come to your conclusions). To everyone else out there: I am not pumping the stock. I am merely contradicting Tony, and pointing out the flaws in his "research". I am long the stock as I buy through ESPP. I also have options as part of my compensation. HOMS is a volatile stock. As I've said before in previous posts, there are moments where Tony will look smart (and make money) and there are moments where I will look smart and make money. Does this mean that Tony AND I are smart? Using Tony's version of logic he'd probably say yes. My version of logic says that BOTH Ray AND Tony MAY be smart but we don't have enough information to know for sure. You all be careful out there Ray