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Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: ted free who wrote (7415)	11/21/1997 1:58:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 9285

TF RE BFIT Ted,ÿ the big pisture for me is the extreme leverage the slow growth and the low profitability.ÿ yes it may take some time for all the dark scenario I describe to happen.ÿ Also, there is a probability I may be wrong!ÿ However, I am putting my short money where my mouth is.ÿ There is no principal due on the notes but they will continue to have a reduced but very significant debt service negative cash flow.ÿ Yes dilution will make matters even worst! >Looks like further dilution down the road if they need to raise more >cash. Why did they have a stock offering and notes, why not finance it all with stock? It seems to good a short to be true? Well their debt-equity ratio is almost 10 financing with 100 % debt would make it even worst.ÿ The market would not swallow the debt at around 10% under that scenario.ÿ There is always a risk to shorting.ÿ You have to make up your own mind.ÿ Yes many of the shorts out there seem to good to be true. IMO this is a much safer short than AOL and I am also short AOL. Short if you can be patient and can sleep well seeing the stock double before going down.ÿ Also, ddiversify your shorts.ÿ Don{t bet your whole ranch! Pancho PS I am short Yahoo, GTW have beem long in the past. Don{t knoe how much more downside there is to it I sold at 43.

To: ted free who wrote (7415)	11/21/1997 10:07:00 PM
From: Pancho Villa	Read Replies (2) \| Respond to of 9285

TO ALL: RE: BFIT. Just when you think you have seen all the deceiving tricks CFO's and CEO's try to pull on the little guys you see this one from todays news on BFIT: biz.yahoo.com 'The company in August raised about $90 million in an eight million share common stock offering, which helped to reduce its total debt-to-market equity ratio to about one-to-one, Hillman said.' You read this and then you think Pancho was lying to you when he told you that the debt equity ratio was almost 10X. Well, They just invented a a new ratio! debt to Market capitalization! a rare mix of accounting standards based on historical values with the current market value of the equity (also, I believe they used long term debt only and not total debt as they say in the release). I wonder if they will still use this version of the ratio once the stock price falls to under 5 bucks. This is the type of deceiving tactics companies have to use when they have nothing of value to promise stockholders! Pancho