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Technology Stocks : CheckFree (CKFR) -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (1727)	2/17/1998 9:20:00 PM
From: TLindt	Respond to of 8545

Very unfortunate. Really the only thing that has ever bothered me about CheckFree was the number of 'Positive' analysts. I prefer negatives......hold/sell.......of course a strong buy is about as negative as you could get on this Company.....IMO.

To: jjs_ynot who wrote (1727)	2/17/1998 10:07:00 PM
From: pat mudge	Respond to of 8545

If there were a person, we could watch for more calls to warn the investing public of stocks about to fall out of bed. I'll get a name for you. My broker (also a fund manager) talked to the guy within 5 min. of the news hitting Bloomberg and will know. Later -- Pat

To: jjs_ynot who wrote (1727)	2/18/1998 2:59:00 AM
From: Robert Gintel	Read Replies (1) \| Respond to of 8545

Gary Craft at Robertson Stephens is the analyst who published the downgrade that caused the selloff in Checkfree today. If one were to follow Mr Craft's reasoning to a logical conclusion, one could only conclude that Checkfree was a short sale, not the market performer that Mr Craft assigned to it. Checkfree's management seems to think that Mr Craft's work is replete with misinformation, inaccuracies, and flawed conclusions. They will appear next week at a Robertson Stephen's institutional meeting, and will make a presentation that will be in sharp contrast to what the Robertson analyst has been telling the world. I am told that three years ago, when he worked at Friedman, Billings, and Ramsey, Mr Craft went on record saying that U.S. Order and Visa Interactive were going to put CKFR out of business. Visa Interactive, a failed company, subsequently was taken over by Integrion after losing $80 million, and will soon be operated by Checkfree on an outsourcing basis. U.S. Order subsequently became IntelData Technologies (INTD)which pretty much dropped off the radar screen after a checkered financial performance. I believe, too, that Mr Craft was the analyst for the Security First Network Bank (SFNB) public offering, touted as the first Internet Bank. After going public accompanied by much fanfare, SFNB ran into financial difficulties and the banking part of the company is up for sale after failing to attract enough business to remain viable. While the software division may have a future, the whole venture runs in the red and continues to be cash flow negative. I question Mr Craft's understanding of Checkfree's business plan. He seems to think that many of the services provided by Checkfree are available from a number of other vendors or can easily be replicated. If I am correct, the key to Checkfree's market lead is the end-to-end customer service and the level of control Checkfree can offer to a customer No other provider comes close to offering the services that Checkfree does. Checkfree now can track the payment, verify that the payment was made, received, or funded, and then correct the few mistakes that may have been made. A competitor must offer all these services to a customer if he is to get and retain his business. It is more than just bill payment or bill presentment. A competitor trying to get into the business would be like trying to build another interstate highway system from scratch, while your competitor is improving the one he has already built and put in place. There is no doubt that the fee per transaction will decline over time as the larger volumes lead to discounts or the flat fees to banks remain the same as the number of transactions per account rises. But the cost per transaction side of the equation, with respect to collection and remittance, falls dramatically, as the number of transactions rise. This cost factor, coupled with the reduced cost of customer transaction costs should lead to higher margins and greater profitability going foward. Furthermore, the huge cost of developing the payment system is behind Checkfree but in front of all competitors trying to get into the business. The major opportunity for Checkpoint at this juncture, is in the evolution of electronic commerce, which by itself could provide $300 million in revenues by the fiscal year ending June 30, 2000, with 20% operating margins. In order for Integrion to get the additional seven million shares of Checkfree stock, Integrion and it's member banks must bring in an additional five to eight million new customers from additional member banks by the end of calendar year 2001. This alone could provide incremental volume to Checkfree of some 210-335 million dollars. Undoubtedly, a major competitor will surface to threaten Checkfree's commanding lead, but it would seem logical that such a competitor must offer services at least equal to Checkfree's and have a plan that that does not envision giving their services away, or they will not be able to run that plan for any meaningful time period. In my opinion, Mr Craft's assertions are concocted theories and no more than that. If he turns out to be right, I will be among the first to congratulate him for being a genius with gresat vision. But in my opinion, the jury is out until then, and I used the panic he created to buy back some trading stock I sold earlier, for this very eventuality. I suspect Checkfree stock could recover very quickly. We have not had a change of outlook for the company. We merely have had a Wall Street analyst publicly voicing a personal negative opinion, which I, for one, do not assign much credence to.