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

To: CalculatedRisk who wrote (7774)	12/3/1997 9:24:00 PM
From: Pancho Villa	Read Replies (1) \| Respond to of 9285

CR: thanks! I am heavily shorted all the y2k dogs and just plan to hold until they fade away...got to have guts for this but at least I know I am not alone. ALYD starts trading NASDAQ tomorrow the leading dog of y2k stocks. I shorted some at 137/8 is now atr over 20 great opportunity when shares become available. The world is full of dummy investors. Pancho y2k short list: zitl, seec, alyd, ddim, zmax, alcy PS: I am short aol and feel quite OK this puppy will come down again [I shorted INTC at 88 saw it go over 100 and then covered to early at 85. WLA at 147 and again covered too soon at 145. NVLS 111 before split and covered too fast at 103. These stocks do move around. I guess I get the shorting fundamentals right but then get impatient. Never lost money on a short trade! also short yhoo, bfit, trbo, ipic

To: CalculatedRisk who wrote (7774)	12/4/1997 5:47:00 PM
From: ThirdEye	Read Replies (1) \| Respond to of 9285

CR: I'd rather dialogue with you re ACLY on that thread, but since you posted here I might as well respond and repost to ACLY thread. You state: " ACLY received a one time "paid up license" from FORD to use their tool." 1. Remember that the original license fee proposed by ACLY is around $250K + a per line fee. The fee quoted some months ago was .02/LOC. That has since been requoted in last Q's CC as between .03-.05/LOC. Ford had 90Million LOC. So presumably revenue from the FORD deal is either far from over or else the "fee" already paid included at least $450K for all the code. After the consulting/training is done, what's the margin on the per line fee? 100%? 2. Remember also that he referred to 6 other jobs underway. Corning, RJR, pharmaceutical, 2 defense contractors, two New York banks. He said the revenue from those deals is just starting to hit the top line AND that the licensing fees for the banks may well grow significantly as they negotiate a worlwide licensing fee. Furthermore, he said that the fee charged to FORD was a deal that no one else is likely to see, especially the international bank which, instead of paying one discounted worldwide licensing fee, will be paying in full for EACH COUNTRY in which they operate. 3. POST Y2K income: Geimer said the migration business-on which their post-2000 hat is hung- is at least a year away because organizations are focusing on compliance now. This is nothing new. It has been mentioned elsewhere that combining migration and y2k compliance is too expensive and complicated to do simultaneously. BUT, to say that having no post-2000 work now is evidence of this company's dim future fails to recognize that(as I understand it) they will be "best of breed" for DEC migration just as they are for DEC COBOL and FORTRAN compliance. IMO, a better question re this company's future is "What do they do after migration?" 4. As for the question of rising costs, Geimer had already commented on that in the CC well before the remark about cost of new office space when he said that new hires are not commanding top dollar. I think he was simply giving a concrete example of how they will be managing to keep overhead under control. I'm sure he was well aware of the intent of the questions about rising costs and addressed them directly. He even said they will not increase head count until after the ink is dry on new contracts. 5. You, and nonzeroa for that matter, seem to feel there was some nefarious intent in not breaking out the figures in the earnings PR. But Geimer did so when asked during the CC, which you fail to mention. BTW, TG also said some other interesting things which may apply to the whole sector. Large organizations are not as interested in "Pilots" as they used to be, presumably because they are realizing they don't have enough time to wring their hands over a "try and buy." The contracts are getting larger and involve more consulting. Incidentally, the "large and ubiquitous government agency" they are negotiating with is the Post Office. Bill, I know you're a smart guy and don't miss much when it comes to numbers and you've helped me understand more than I used to, but for the life of me I don't understand how you could post such an incomplete message unless you really didn't hear some of the things I did. It almost sounds like you are trying to convince others to short without mentioning contrary evidence. One thing that does disturb me is this: he should know what the backlog is, if they really had one. So I am left with the uncomfortable impression that they are not overwhelmed and that unfinished business with existing customers does not amount to significant revenue. Heck, everybody's on their own anyway. They might as well hear more than one perspective. Regards.