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To: MACA who wrote (3574)	12/3/1997 8:34:00 PM
From: P. Ramamoorthy	Respond to of 10786

MACA - Agree. Went through a similar exercise with their 10Q. Discounted 33% due to code packaging problem and come up with 20 cents or so. If ALYD demonstrate operation of their factory at full swing, revenues should go higher, closer to their target of $15Million. It'll help to know how many more lines are flowing into their factory as a result of improved code packaging and customer training. Without knowing what the flow of work (and billing cycle), I was not sure where their next qtr will be. 20-30 cents/sh. Hoping for the best... Ram

To: MACA who wrote (3574)	12/3/1997 9:30:00 PM
From: tech	Read Replies (1) \| Respond to of 10786

Here we go again. >> Gruder mentioned in the Charlotte Observer that the co. will gross $15,000.000 for '97, up to the third quarter the co. had about $4.5 millions, that gives us about $10.5 millions for the fourth quarter. Their burn rate has been about $4.5 per quarter even if we went to $5 millions for this quarter that leaves us with more than $5 millions profit. Not bad for 30 cents per share. Uncle sam willn't get any change because of the previous losses. 30 cents per share I figured it should give us a stock between $30 to $50, not a bad start wait till '98 #s start rolling in, so far they predict to do $125 millions in sales just a few months ago they had only $50 mills that's how quick these #s are changing. GOOD LUCK! << I have no idea how you end up with a stock price of $30! to $50 ! If the ALYD makes $15 million in revenues for 1997 they, as previously discussed and as stated in one of their PR's, will BREAK-EVEN for FYE 1997. But just for the sake of argument we will say that ALYD is able to bring in $20 million ! in revenue FYE 1997. That would give them a profit of $5 million for 1997. I believe currently ALYD has approx. 17.5 million shares outstanding. [$5 million total revenue / 17.5 million shares] = $.28 per share. $.28 per shares x [ P/E of 50] = $14.00 [ P/E of 60] = $16.80 [ P/E of 70] = $19.60 [ P/E of 80] = $22.40 [ P/E of 90] = $25.20 [ P/E of 100] = $28.00 [ P/E of 120] = $33.60 . . . [ P/E of 178] = $49.84 As you can see even if ALYD manages to pull in an extra $5 million in revenues this year and produce a total of $20 million in revenues FYE 1997, ALYD would have to trade a P/E of near 120! to approach a stock price of $30 and over a P/E of 178!!!! to near a stock price of $50 if you think ALYD will go to $30 to $50 this year, you are NUTS! This latest stock surge has more to do with market phenomena than it has to do with any fundamental reasons. The main reasons the stock has moved like it has: 1. NASDAQ listing and marginability 2. SHORT COVERING I would go as far as to say probably $4 out of the $6 the stock has moved so far is mainly due to short covering. If ALYD is going to see $50.00 stock price in 1998 with a respectable P/E of approx. 30, then they should have at least $1.67 in total revenues per share. I also think that there will be more shares outstanding by next year, so I am going to use a figure of 20 million To achieve total revenues of $1.67 per share, ALYD would have to generate: [ $1.67 per share X 20 million shares outstanding ] = $33.4 million net. We already know that they have approx.. 300 employees this year and their total expenses will be approx. $15 million FYE 1997. (if you remember that is their break-even point) ALYD has already stated that they will be up to 500 people in 1998. So I think it would be reasonable to say that their total expense should double to approx. $30 million. So if ALYD needs to pull in net revenues of $33.4 million, and their expenses would be near $30 million, then they would have to gross approx. $63.4 million for 1998. Is is possible ? YES Is it going to make the stock go to 50 anytime soon ? I don't think so Remember, as of right now ALYD officially projected revenues for 1998 to be only $50 million. If by Q2 we see that number was truly underestimated, then we may start to see the stock head to those higher levels. As you can already see getting on the NASDAQ is great, but it also brings out all the "shorters" out of the woodwork. I personally think that the most important thing about shorting is knowing how to play the momentum. If you don't know how to play the momentum, you will get burned every time. The momentum is clearly on the side of the BULLS right now. As I indicated before, I still think that we have some more shorts out there that need to be "shaken out" before we see this momentum stop. How high will we go in this run ? It all depends on how many shorts are still out there and if the company can keep up the momentum with more news releases.