Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: ratan lal who wrote (10056)	5/9/2002 9:08:05 PM
From: JSwanson	Read Replies (3) \| Respond to of 10309

WIND lost $4.85 per share WIND has a book value of $4.31 (so current price is 1.35 x Book) WIND has cash of $1.95 per share If it continues to lose $4.85 per share, then it will be out of cash in 6 months. WIND has an accumulated Loss of $353,388,000 So unless WIND starts making money soon or cuts expenses by 50% it will go the way of Worldcom whose Bond rating was dropped to junk status. And people have used the arguments for Worldcom similar to what I see here for WIND to maintain its stock price till they finally capitulated. While I am certainly not pleased with with WIND's performance and the massive decline in the quality of its balance sheet, one needs to be fair about the loss you assign to WIND for fiscal 2002. The vast majority of that loss was due to the non-cash writedown of goodwill (approx. $255 million) associated with purchases WIND made in 1999 and 2000. Those purchases were, for the most part, made with (inflated by today's prices) WIND stock. Due to the decline in the stock price of WIND and the deterioration in the market in general the company wrote down the investments to reflect the current environment. To say that WIND lost more than $350 million in fiscal 2002 grossly overstates WINDs loss. On the other hand, WINDs performance was overstated in the years the acquisitions were made. In short WIND is not anywhere close to a $350 million loss per year run rate. That said, it is my opinion that it is going to be an extremely tough environment for WIND over the next year or two. I am not counting on any quick rebound in this portfolio holding. Long-term, I still believe WIND has lots of potential. Finally, one small rant: I appreciated so much of Allen Benn's commentary regarding WIND and its potential opportunities. I find it very perplexing that when the whole tech sector imploded that he disappeared. It gets under my skin that when WIND hit this major turbulence he became silent. (Disclaimer: I am not pointing any blame for my investment in this company. It is my sole responsiblity and I still believe in its potential. I am just confused as to why someone who seemed to understand the company and its markets so well would cease to contribute when the going for WIND got damn near impossible.) Regards, JS