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Technology Stocks : PEGA - Pegasystems -- Ignore unavailable to you. Want to Upgrade?

To: Trader Dave who wrote (300)	11/19/1997 12:08:00 PM
From: Clam Clam	Read Replies (1) \| Respond to of 504

Let's put it this way. PEGA did $7mm in revenue in Q3, according to the auditors. Since this issue is finally well known, the stock should now reflect the accounting. Before, you couldn't compare this company to other CIS companies because the accounting was totally different. Let's say FDR pays PEGA $5mm this quarter, just like PEGA says. PEGA only recognized $1mm last quarter of FDR revenues so let's add $4mm of rev's to PEGA's reported number (the payment should come in under 90 days). That gets you $11mm for September. The market cap is still > $600mm. Vantive just did $31mm in revenues (with $21mm in A/R - <63 days) and its market cap is about the same as PEGA's. PEGA's revenues will certainly grow faster than VNTV's because it is coming off a much smaller base but it will be a while before PEGA is allowed to recognize $31mm in a quarter. Moreover, I don't think there is any way to argue that VNTV's management is not SIGNIFICANTLY better at executing than PEGA's. PEGA is a company with a great product and not much else. In fact, you could almost equate the VNTV/EDS issue with the PEGA/FDR deal. At least EDS paid VNTV cash and VNTV didn't agree to buy anything from EDS in exchange for the deal. PEGA does not fit my criteria of a well-managed business so until it trades at a discount to VNTV, or until VNTV shows signs its growth is not in tact, I will stay with VNTV. Let's let PEGA get some auditors and prove just 1 quarter of positive cash flow and show some production out of its sales force. (I don't think they have had 1 cash flow positive quarter in their history). I loved the part on the conference call replay where an investor asked why the $5mm in Q2 (over 1/2 of revenues) wasn't in the 10-Q as a 'material' item. Seems it didn't occur to PEGA to report it.....

To: Trader Dave who wrote (300)	11/19/1997 12:12:00 PM
From: Amsterdam	Read Replies (1) \| Respond to of 504

I've been following PEGA and this thread for a while, hoping for a correction to pick up some PEGA cheap, but this is not the type of correction I like to see. Very surprised to see Sherlund at Goldman upgrade so quickly given all the uncertainty. I agree he probably had a look at the pipeline, but having sold a lot of software in my days this company has the trademark of getting ahead of itself with hype, which is a culture that filters down to the sales rep level....i.e. the salesmen are probably hyping their forecasts more than normal. Also, customers can get uneasy about vendors that are loose with their numbers and delay implementations until the dust settles, especially conservative customers like financial instituions of which PEGA has many.

To: Trader Dave who wrote (300)	11/20/1997 2:21:00 PM
From: Geof Hollingsworth	Read Replies (2) \| Respond to of 504

>>Rick Sherlund is stepping up. Rick is a good guy and an ethical one as well.<< Sherlund is the Goldman analyst? I'm sure you are right about his ethics, but let's all remember that Goldman's name and reputation are already at risk with these guys (they did the offering, right?) and they have been the largest market-makers, which means they probably had a share or two in inventory at the trading desk when the bottom fell out. Rick may be a saint, but Goldman is hardly in a position to be objective on this one.