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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (3535)	2/24/1998 9:43:00 PM
From: Bob Trocchi	Read Replies (1) \| Respond to of 18691

To All: OFF TOPIC: Time for a chuckle. I could not resist posting the following quote from an IBM executive which appeared in the Feb. 20, print edition of the WSJ. It surely provided me with a good laugh. Say that again?: When asked whether International Business Machines Corp. has talked to Netscape Communications Corp. about investing in the Internet software company, IBM's Internet chief, Irving Wladawsky-Berger, told the San Jose Mercury News: "It is a question that even if we had, which we haven't, I couldn't answer. The answer is no. But even if it wasn't no, I would have to tell you no because it is not something I could comment on. Regards Bob T.

To: Roger A. Babb who wrote (3535)	2/24/1998 9:49:00 PM
From: MIKE DUBIS	Read Replies (2) \| Respond to of 18691

roger: if you had to pick one stock tonight to short, with puts, with a march expiration, what would it be?

To: Roger A. Babb who wrote (3535)	2/24/1998 11:40:00 PM
From: Tom Hua	Read Replies (4) \| Respond to of 18691

Roger, hope you pocket a bundle with ETEC tomorrow (I don't follow it). Another one you might want to take a look at is NTKI. Here's the story 1. Business: -Online music store. That's it, plain and simple. 2. Operating Results 1996 1997 Revenues($M) 1.7 11.7 Losses ($M) 18.9 28.7 LPS ($) 6.85 5.88 Cutthroat business, gross margin <10%. 3. Competition -Over 200 sites currently selling music online -Major competitors:CD Now, AMZN is ramping up to enter in 6 months. 4. Underwriters'spin - Projected NTKI to do $200 M in 99 and turn a profit in Q3/99. - See #5 for third party projections. 5. Projections for total online music business - Jupiter Communications'projected total online music sales: Year Sales ($M) 1998 81 1999 174 2000 354 2001 670 - Jupiter's #s is $174 M for all online music sales. If NTKI is lucky, it may get 25% of that, or ~$43M, far from the $200M estimated by NTKI's underwriters. Therefore, NTKI will incur losses well into the next century, if it can last that long. 6. Balance Sheet - Company did not disclose cash status in its latest earnings report. Total assets are $57M. Much of the IPO proceeds was used to payoff debt and to "partners" such as AOL (paid $10M to AOL with IPO proceeds out of $18M commitment) - With its current loss rate, company will need cash infusion in a year. 7. E-commerce stock - Ah, but this is an internet/e-commerce stock. Who said earnings are important? 8. Target - Realistically, target should be in single digit. But in this irrational market and #7, I'll take $15-$18. (Shorted a bundle @$26 1/4 couple of days ago). There's more, but I don't want to take away the fun from your DD. Regards, Tom