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Technology Stocks : Macromedia...making a comeback? -- Ignore unavailable to you. Want to Upgrade?

To: Tom M who wrote (2062)	2/4/1998 4:58:00 AM
From: alex	Respond to of 2675

Macr: Zacks change Rank up to 2 this week. Two month ago rank was 4...

To: Tom M who wrote (2062)	2/4/1998 10:51:00 AM
From: John Nail	Read Replies (1) \| Respond to of 2675

<< It's historic low is 1.8 times book and it's currently trading at 2.7 times book. Most companies with this recent performance would probably dipped below book IMO. What a waste of technology, the public will only pay so much for software.>> It seems to me the public will pay alot for software if it is a "standard" and with high volume. Because the marginal costs for software production are zero the profit margin on the product is enourmous. However, selling and advertising are the real costs of software. The more it is a standard and the higher volume, the less the S&A costs per unit. Book value for a software company is just the cash and any property they own. However, the software product itself is usually not reflected in book value unless (I think but I am not sure) the software was bought from another company. The usual residual that is recorded as goodwill could be thought of as the value of the software. For MACR's $9 a share, you get $2.50 in cash and all of the products and no debt. So, the market says all of MACR's products are worth $70 million. Geez, their sales are almost $100 million. The market wants to value this company higher it just doesn't believe that this management can make any money on existing $100 million in sales in sales (let alone any growth). It really is an indictment of management. Also, the market sees the wreckage of other companies that just never turned around. (Novell and Quarterdeck to name two.)