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To: Michael C. Woodward who wrote (1990)	12/7/1997 1:29:00 PM
From: Bobby	Read Replies (1) \| Respond to of 60323

Entry into retail sales may impact short term earnings - Anytime a company enters into retail sales it has to set aside a substantial (?) sum for product warranties. This liability account will affect net income in this quarter if retail sales numbers are not accounted for in this quarter. Once retail sales increase, the product warranties account can be matched against the revenue account. Its only my hypothesis(although its based on accounting principles that I am aware of) so please feel free to shoot holes. Ofcourse it doesn't change the fact that long term prospects are great. I only put forward the hypothesis to support Mr. Harari's cautionary comments - he must have known the above. Bobby

To: Michael C. Woodward who wrote (1990)	12/7/1997 4:56:00 PM
From: Sam	Read Replies (1) \| Respond to of 60323

Michael, Thanks for reporting your conversation with Eli. Personally, I appreciate his candor--even if it means that the stock tanks for a quarter or two. He is not in this for a quarter, a year, or even two years--as he said to you, he is trying to build a major company. That takes time, and involves risk. It also takes a certain courage and integrity. He cannot and should not be managing the company with the stock price in mind--the price of the stock will take care of itself if he is successful in his goal of building a major company. Frankly, the stock got ahead of itself when it flew to the high 30s. I said so then, and still believe it. Whatever he said at the CC, the stock would have come down from those levels. Possibly it is somewhat undervalued in the low-mid 20s, but so it goes--if one properly discounts the risk of competing against heavyweight companies like Intel and the many Asian competitors, maybe it isn't undervalued here. Whatever. In the end, if you are an investor with at least a 2 or 3 time horizon, it doesn't really matter. The point really is, what is your goal for the stock? Are you a trader or an investor? If you are an investor, then I think that this company could well be a wonderful buy for strong capital appreciation. Its products and markets are just beginning to gel. No stock like this one will go straight up--there will be periods of straight-up and periods of straight-down. When you buy the company, you should know that this is that type of stock. If you are a trader, you get out after a straight-up move. No CEO can or should be managing his/her company for traders or for a short term move. At some point over the next few years, if EH is successful, then the up move will be straight up for awhile. In the meantime, you believe in him and wait, or you try to time things, and catch the moves. Your choice. But not his--his only choice as CEO is tell it the way he sees it.