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Technology Stocks : Applied Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Mark Bracey who wrote (104)	3/18/1998 5:36:00 PM
From: Smilodon	Respond to of 134

Thanks again.

To: Mark Bracey who wrote (104)	3/18/1998 6:46:00 PM
From: Smilodon	Read Replies (1) \| Respond to of 134

A couple more thoughts. Ironically, if you take my valuation projections for the different scenarios and combine with your probabilities, you get a stock price of almost exactly what it is currently trading at. I know this is over-quantification, but it is a good exercise in understanding the risk/reward of an investment. Japan has been about 40% of sales in the past. Most of this was the older (SuperTap?) products, not CodeTest. CodeTest continues to grow at about 30% across the board but I think it is still below 50% of total sales. The company blamed Japan for the shortfall in the Dec. Qtr. I agree with your assessment of MSFT. I suspect WIND was a little annoyed with APMC over the Windows CE announcement given their OEM relationship. As far as agreeing with Shakespeare about the VC's, I don't agree. I was a VC and am currently a hedge fund manager. It is possible an investment banker will take a company public from a very reputable VC that they would not take public from a 2nd teir firm. But creative accounting? If an IBank takes a company public like that, they are very likely to get a blow up as the company quickly fails to meet expectations. Do that very often and you cut your own throat (and career). Compounding the problem is that the syndicate will usually support the stock price for 90 days after the IPO by buying all stock for sale just below the IPO price. Get some shaky accounting out there and before you know it, the syndicate owns a lot of the stock and is left holding the bag. Not worth a 7% fee if you get 100% of the loss. And don't think the institutional brokers don't know which of these stocks is on life support. They will get all their clients to dump their shares on the trader, and let you get short if there is an uptick. (ex. see chart for BDOG to see how the support works) Different groups within these firms have little loyalty with each other. The IB's can get deals placed with their clients only by acting as a filter to sort out obvious problems like that. A small seedy IB might do it just to get the fees, and then run, but one like H&Q has too much to lose. This isn't being honorable, it is just looking after their own self interest. Also, like I said to him, the VC's are long gone from this one. I checked the ownership and I know who the VCs are. The real driver,if they choose to be, is a small cap manager called Kopp in Minnesota who owns about 24%, and I have spoken with them. H&Q really doesn't care. They keep up coverage as part of the implicit deal for the IPO, but the stock is too small to generate enough trading volume to pay for the analyst's time. And now I will get off my soap box and get back to work.