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Technology Stocks : Echelon Corporation (ELON) -- Ignore unavailable to you. Want to Upgrade?

To: AE who wrote (2972)	4/20/2002 3:38:58 AM
From: Ted The Technician	Respond to of 3076

AE. I've been short for the longest time. I shorted at a time when I should not have - at the beginning of the Enel deal when revenues were just ramping up. At that time I didn't know anything about the oncoming Enel deal. In the meantime, I've learned that ELON has a long sales cycle when dealing with major customers like Enel. After the contract is "signed", there is an initial pre-deployment cycle that takes many months (quarters?). Revenues from the Enel project is seen to be flat for many quarters more, after which it should then decline. Analysts are currently focused on that Enel revenue decline stage and how it meets up with the revenue ramp up from another major customer. If there is no major customer wins soon, ELON could be faced with high fixed costs with declining revenues. However, the more immediate challenge is to collect on its loans to the Enel partners so that it has enough cash to run its daily operations. I would short some more if it goes above $20 without another major customer win.