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To: Papillon who wrote (12563)	3/4/1998 3:21:00 PM
From: SE	Respond to of 17305

John, I may explain BNGO later, but for now anyone who followed me into MAVK a couple of days ago might want to read this. I almost doubled down today, but did not because I did not know why the drop. Here is why and now I am kicking myself for not having the big 'uns... -Scott ---------------------- Subj: Here it is.... By: dandace Date: Mar 4 1998 10:25 A.M PST Reply To: Msg. 206 by becro Could not copy it so here is the jist... Here is the scoop on MAVK....The had a conference call with Raymond and Associates, George Baum & Co. last night. They lowered estiments because of weakness in its OCTG business. Est. are lowered. 1998 earnings est lowered to 1.65 from 2.02 1999 lowered to 2.30 from 2.75. "Despite these reductions,MAVK's valuation remains very compelling as is trading at only 11x revised 1998 estimates." Foward PE 9.3x Projected Range 35.00 to 12.00 Book (12/31/97) 5.48 Buy **************************** George K. Baum & Co. Lowered estimants from 2.27 to 1.74 with most reduction comming in second and third Q's which were reduced from .43 to .30 and .64 to .55. Inventory Reductions believed to be temporary. Rebound in rig count by early summer. They have not reduced 1999 estimates from 2.89. "We feel market has over discounted the short term inventory correction" Buy

To: Papillon who wrote (12563)	3/4/1998 10:51:00 PM
From: SE	Read Replies (1) \| Respond to of 17305

You wanted a BNGO story, well here goes.the short version. Last spring I was playing the Dead Cats on the Dead Cat thread along with Rodney Babcock amongst others. Say what you will about Dead Cats, but picking the right company from a fundamental standpoint and trading it you can make some serious money. In fact at some point in the future I want to do a paper portfolio and eventually a real portfolio trading selective dead cats with a 6 to 8 week holding period. I believe it would be possible to average 20% return for the 6 to 8 week time frame by picking selective dead cats, but that is another topic and for another time. I would imagine I could generate some pretty strong debates on the thread discussing dead cats, so I won't do that.probably even definitional questions as to whether it really is a dead cat or simply a stock with a precipitous drop. Whatever.. Anyway, I developed respect for Rodney as he had some keen insights. One day he mentioned BNGO. I ignored it and a few weeks later he stated he was giving up dead cats to put all into BNGO. At that time I looked at it briefly, posted on Stock Swap and bought my first 1,000 warrants at 25/32. This was June of last year. Well, the damn things kept going up, slowly, but over the next couple of months they were around $2.50. I started to look at the company and they had a debt free balance sheet, several quarters of sequentially increasing earnings, an easy to understand business and essentially no competition. Their stated goal was to consolidate the charitable bingo industry. Their public offering netted them around a couple of million and they had built up a nice portfolio of bingo halls while returning 30% on equity to the shareholders. Looked like a slam dunk. At that point I started to sink more into the warrants. After all, I could buy the warrant and greatly leverage my money. The stock would go up 15 to 20% consolidate for six to eight weeks and then ramp up again. This whole time management was announcing new acquisitions, better earnings, they were posting to the thread and everything was rosy. Future outlook was grand! The stock reached a high of $10.5 and the warrants a high of $5.5. My highest warrant purchase was $5.25. Yes, I was still holding and buying more each time it would ramp up. Everytime I bought I was rewarded very shortly thereafter with a higher price.surely this would be no different. There had been no fundamental change in the company at that time. I started to target a $20 stock price by middle of this year as a personal target. I could justify that very easily by bingo hall acquisition numbers, the newly entered video gaming market in SC and the management's continued brilliance and earnings increases! In November the warrant call came. The stock had to trade above $8 for 20 days in order to call the warrants and it did. One warrant plus $5 got you one common share. The call was Nov. 13th. I remember that day. We had all been speculating a call would come and even read an article on what happens in warrant calls. westergaard.com:8080/Notes/almi.html I had read the article and I posted to the thread as to what the best strategy would be if the call came. It would be to sell the warrants on the day of the call and wait till the call was over and then buy the stock. The call ended on Dec 22nd. My brilliance on paper is only exceeded by my stupidity in real life. I never did sell the warrants. In fact, each time a drop occurred I believed the fundamentals would win out and they would return to new highs. Rodney posted on several threads that the quickest way to double your money would be to buy the warrants at $4, shortly after the call was in place I believe. He felt, as did many myself included that if the company could build what it did with a couple of million, just think what it could do with about $15 million in new cash from the warrant call. This was the sure thing! Surely everyone would see that. However, we all underestimated the arbitrage action that took place. What occurred would be a wonderful textbook example of a played stock. What you could do was short the stock and continue to short until the stock dropped in price. Short it all day long, you were guarnateed a profit. As the stock dropped some others started to sell to lock in profits and we had a snow ball effect. Eventually you would not cover your short, but instead would buy the warrant. Or if you already held warrants that you purchased at pennies, you never would even have to buy the warrant. In any event you short at $8, buy a warrant when the stock is at $6 (warrant price $1), send the company $5 and you locked in $2 profit. Very simple very easy. The key is you would never cover your short with open market shares.but with newly issued shares so no short covering rally was to come during the warrant call. Theoretically you can arbitrage this all the way down to parity or $5 in this case. 1 warrant plus $5 equals one share of stock. This is exactly what they did and the warrants traded down to 1/16 and on the last day of trading they stopped trading about two hours before the close. Many who bought for leverage did not have the $5 to buy the common with and were forced to sell. This was another dynamic that made this warrant call so spectacular. The arbs knew that the euphoria placed many in the warrants that did not understand the true nature of the warrant...you need $5 to cover the damn thing. It was the mother of all margin calls and many were literally wiped out. How could a company with such strong fundamentals fail us so miserably. Well it happened and it was nothing the company did.it was the market that beat us. Well I scraped together the money necessary to convert my warrants. The usual thing that happens the day after the warrant call happened with BNGO. It went straight up from $5 to $7 ¬. The reason for this is that the arbs who were shorting shorted more than they could cover with warrants and it is at this time you so a short covering rally. It was fun.the old days had returned! Well, not really. Shortly after that the stock started a protracted downtrend and now stands at just under $4. Yes, the same stock I just shelled out one warrant plus $5 for. Turns out things were not so rosy in rosy-land. Management had some infighting going on, not to be confused with inbreeding, but that is another topic. This led to disillusion with and a loss of confidence in the management team. In addition they closed some bingo halls that were unprofitable and although they are making more with the halls they left open than they were with all the halls, their plan of consolidating the bingo industry is somewhat brought into question. They have 14 halls now and stated they expected to have 25. Further, SC is in a huge political struggle to ax video gaming..70% of the company's current revenue. The stock traded as low as $3 1/8. I was gone shortly after the drop from $5 and have been in and out down at these levels and have made some good trades, but needless to say am still way behind the eight ball. Shit, I had warrants expire worthless..the one's I so brilliantly bought at 25/32 and watched run to 5.5, expired worthless. Unreal. Many mistakes were made. There were technical signs throughout the drop that screamed "get the hell out!" I missed them as many occurred before I started to really study TA. Since then through an application of TA and thread psychology I have been able to trade this stock and make some money. When the thread gets euphoric I sell. Right now I don't own any as the thread is dead and I see the stock as dead money for a while. However, that being said, I think SC will keep the video games..they make too much revenue off of them and they are doing some acquistions now that will re-establish their commitment to consolidating the charitble bingo business. I know how much per share they make on 1 bingo hall. I know how much they make on video gaming. I know how much per share G&A expenses cost us. I have spoken to the CFO twice and have read employment agreements. I know where their expansion plans are and where they are at on them. None of this is inside information. It is all public knowledge if you invest the time to track it down and ask the right people the right questions. Do I know everything? Not at all. They still surprise me as you could find out if you read my corporate estimates for fourth quarter. At one point I thought they would turn in $.15 per share. Now I believe it will be $.07 or less, probably less. This will be the first quarter in the last eight that they show less earnings than the previous quarter. They will turn in $.41 or so this year and next year it will be anywhere from $.25 to $.40 (CFO's estimates). If things go very well in SC and the acquistion front, I expect them to do $.50 to $.55 per share. The stock is basing right now and I expect some good news on the acquistion front by month end. I also expect them to consider and possibly announce a share buy-back, although this probably won't be announced until early April. I also expect in May that SC will keep VGMs. By the end of the month we will know what earnings for fourth quarter will be. I expect them to be horrible and that may cause a one day opportunity to re-enter the stock. I will be back in this issue and will ride it up again, however this time I will not make the same mistakes..I will not make the same mistakes...I will not make the same mistakes... So there you have it. A tale of woe. A $3.75 stock that will earn $.41 this year and probably that much next year, all the time while continuing to consolidate and ramp up their business. I think they are back on track, but it will take time for investor confidence to return. Before it does, I will be back. This stock is a fairly safe bet below $4. However, if SC outlaws VGM's, you will see it cut in half and have a new trading range of $2 to $4 for the next year or so. I don't think they will do that, but the SC politicians sure are a strange bunch. They just might do it. Who knows. Anyway...aren't you glad you asked! -Scott