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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (14804)	3/31/1998 2:25:00 PM
From: White Shoes	Respond to of 18263

RISK FACTORS from ZITL's 10-K filing (4th in a series) "The Company has invested $5,879,000 through September 30, 1997, to acquire approximately 33% interest in MatriDigm Corporation, a private company organized to provide software maintenance and re-engineering services for users of IBM mainframe computer systems. MatriDigm has primarily focused on development of a set of automated tools to identify and specifically modify dates within IBM COBOL programs so that the programs will function in the Year 2000 and beyond and to test the modified programs. In May and June 1997, MatriDigm announced commercial availability of an automated toolset for a windowing solution for programs written in ANSI COBOL 74 and ANSI COBOL 85, respectively. MatriDigm intends to continue to refine its current toolset and to extend its toolset. Industry sources report a multi-billion dollar demand for services such as those being developed by MatriDigm and an automated toolset should provide greater profit opportunities than can be realized using other available methods. However, the demand for Year 2000 conversion services has emerged at a slower pace than originally anticipated, thus MatriDigm has not realized significant revenue as yet, and there is no assurance that it can successfully market its automated toolset, develop extensions for other computer languages or generate substantial revenue and profits. During the course of development, the Company has made additional investments in MatriDigm and may make additional investments in the future."

To: Pancho Villa who wrote (14804)	3/31/1998 2:26:00 PM
From: Jacques Chitte	Respond to of 18263

Sorry, I cannot say any more. I've just been slapped with a "cease and desist". I'm sure you understand...

To: Pancho Villa who wrote (14804)	3/31/1998 2:33:00 PM
From: White Shoes	Read Replies (2) \| Respond to of 18263

YOU DO THE MATH: Some fancy figuring from the Yahoo! ZITL thread (but remember as one long put it, "figures lie and liars figure" whatever that means): Zitel needs to earn more than $240 million in the next two years to justify its current market cap. So we are talking about $120 million a year. A generous net profit margin is 10%, not 50%. Keane, a real live company does not get as much as 10%. Zitel needs to have revenues of about $1,200 million this year to earn the $120 million the market cap requires. If revenues on a job is $10 million, you need 120 jobs this year. The year is half over. That is about one contract per work day. When you need one a day and you have never gotten any, this makes a pretty difficult argument to be long. That is why no long ever discusses it. Do the math for what MD must earn and you start getting dizzy. - Courtesy "Mr. Heartless" P.S. I don't know if we need to put such a high standard on ZITL. Even if we ask it to only earn $50 million this year, it won't come close. I think some of these longs are confusing Y2K revenues (of which ZITL has none by the way) with Y2K earnings. I think another issue that needs to be explained is the contribution of Matridigm to ZITL's earnings. Because the answer is likely to be slim to none (which could be good considering Matridigm doesn't make money), the longs have had to concoct this new "merger" story, as if this would solve anything for these two pathetic companies.