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Microcap & Penny Stocks : ATEC Group. Huge growth with PE of 12.5! -- Ignore unavailable to you. Want to Upgrade?

To: rt1^ who wrote (814)	10/23/1997 6:18:00 AM
From: TokyoMex	Read Replies (3) \| Respond to of 1298

I requested for a face to face meeting. CFO and I agreed to touch basis and call on Monday for a meeting. Meanwhile, I felt it was imperative to push the meeting forward so I called Mike and asked him to organise it with CFO. He said I will have to sign some kind of non disclosure and I said I will sign them, just let me look at some numbers and performa contracts of some kind. Got a call from CFO saying why they can not show me any of the stuff because it is non precedent and has never happened before and they do not wish to set a trend. I agree with their rights but was surprised by sudden reversal after I thought we had an understandindg to come and visit and sit down and look at some paper works. I said then send me all the information by fax such as where revenue was coming from who are the clients , how you are addressing the y2k and what are their qualifications etc. So far I have received following and I believe this is the extent of the information I will be getting. - ATEC has been designated as the 15th fastest growing co in Long Island, New York area at 240% increase over 5 year period, at revenue of 80 mill. News to come out today. - The ten million with NY State is open end contract. But I am told that Mike Irving told several people that it is simple straight contract for ten million. - Computer Retail Magazine this months issue (WWW.CRN.com) Had an article an Computerland, which is a subsidiary of ATEC and had 20 mil rev in 95, 26 mil rev in 96 and expects 36 mil next year.So this is the whole sale part I presumed earlier. Workers assemble the parts at ATEC and Computerland sells them at margin of 9%) - The recent start up of the graphics co was set up by hiring the management away from a company that had 15 million dollars in revenue and these guys feel that they can equal past earnings. -Their y2k program is to use third party software ( they do not have a software of their own as told by Mike Irving) of customers needs or choice (not a Boston Firm as I was originally told by CFO) -In my opinion Atec do not have any serious y2k plan or qualification at all at this point. I also believe they do not have a single COBOL, Fotran or DEC-VAC migration people with training in remediation. They will use third party mostly including a co in India called Software Express India, via satellite to transferr data back and forth for a large job according to CFO s footnote on the copy of their web site on y2k. I also believe that they do not have this 100,000 y2k contract unless they show me or tell me who the client is under non disclosure terms which I have agreed. Their general y2k pitch is we can do it at 1/2 the price of what ever you are being charged by using offshore resources ( Software Express India I presume) - The list of their exisitng clients are CCI , CMB, Major League , North Shore University, Bank of Nova Scotia, Avis Wiscom, Depository Trust, Loehman's Insurance, US Dept of Justice, US Marshhall Service, United Way, Westinghouse, U of Michigan, Ziff Davis Publishing, Havard Med School, Intercontinental Hotels, Net Source. Given to me in a hand written note by fax from cfo. As for in what capacity they are ATECs clients I do not know. -Acquisitions, CFO tells me that for 100 million dollar rev company the going price is around 5 1/2 million dollars, which surprised me greatly. I thought it would be more. So my earlier post on the price being 1 1/2 times revenue was wrong. Mike also inputs that the price of the acquisition will be perfromance based. So going back to my theory of dillution of 20 million shares presplit at todays price or 4 million post split is inevitable. Their argument is what does it matter if its dilluted as long as the acquisitions adds to the bottome line in a positive way and this theory has merit. However, from the acuisitions to the first bottom line the stock will come under the pressure. Speaking from historical and general trend of the reversed stock. Post split with 3 acquisitions will bring shares to 10 million shares at calculation og 5.6 mil but most likely as reserve they will dillute another 1 or 2 million to be safe at post split price of 5 a share. If the share price comes under pressure say to 3 which will happen most likely, they will increase it proportionately for the reserve. This is my conclusion. The company has certain ethical obligatory responsibility to those share holders who lost money having paid higher price then 1 1/8 of todays price or at least the diffrence of 1 7/16 opening price of the post announcement and the previous nights closing price of 1.821 (If I am not mistaken) by not informing the PR or addressing the questions when it was raised by the investors to Mike Irving (See posts going back to August on this issue as well as abundant questions to PR over the phone on same issue just days before the the split announcement. He should have gone back to the management and asked "Hey Surinder are we going to split ? and Surinder as CEO shud have said yes the board of directors of which I am a member at least is contemptlating at the urging of Meyerson. For certainly the decision of reversing did not happen over night rather it was raised by Meyerson at the time that they became ATECs MM , which was some time in July - August !!!!. Meyerson told me that they recommedned it and ATEC CFO also confirmed to me that it was Meyersons idea. As for PR not knowing I feel it is most unlikely when, Mike was headed for NYC that very day to meet with so call the big MMs in behalf of the ATEC, I am sure company has advised what was taking place. Also a news like that gets passed around the lips of the senior management at least one or two days before the announcement. Some body is liable. You decide who is to blame ! Its either our stupidity, PRs neglect of his duties in this case he went beyond the norms of a PR man,He not only expressed his personal feelings rather generously but also spammed it on other board soliciting investors or it is either ignorance or deceit by the co to have the PR guy pumping while the reverse was being planned. Meyerson not disclosing at the time of coverage not including a bi line "that we recomed ATEC reverse split" I also believe that those MMs involved shorted ATEC on the eve of the announcement at 1 3/4 and higher,further now they are supporting the price at 1 1/8 maintaing the status quo of desired post split price of 5 as mentione here often. I make this assertion from the ticker and the volume of the shares that has gone by since the reverse. Many of us took loss here, Mike Irving has lost his credibility and I doubt he can ever successfully represent a company here on SI and perhaps it is a bad medium for him. Atec has lost credibility by not sharing a simple answers to investors questions such as those I pointed out in the beginning of this report. Meyerson and others has lost credibility for continuing to be what they are. One of these days I hope to see Meyersons name with JP Morgan , Salomon, Meril. I dont think I will see it in my life time. Will ATEC grow as they have been ? I belive they will grow according to cfo, but not on y2k business. This I am certain. Will I invest money in this company ? I think the return that they are talking about at stock becomig 12 , 15 and 20 after the split is far far away and there were too many wishy washy conflictig stories passed around to me from diffrent sources who are supposed to insiders. If I was looking for a bottle neck I like my RADAF at 9 CCSI at 14 my CREAF at 8 RNTK at 1/8 and now TPRO at 3 and on and on. Having sold all my shares yesterday , I will now stay and watch as a share holder of the record during those miserale days and I want to hear from those who have lost money and how they lost and the conversations you have had with PR or the company. I bid god speed to all those involved. Joe