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Strategies & Market Trends : Shorting stocks: High fliers -- Ignore unavailable to you. Want to Upgrade?

To: Dante Sinferno who wrote (480)	4/23/1998 5:36:00 AM
From: Q.	Read Replies (1) \| Respond to of 709

all: SEVL is the highflier with the ugliest fundamentals I can find. They used to sell computer games, at a big loss, and exited that business in 1997 to try to license their technology instead. They are now down to 30 employees. The stock went up 4X in 2 days, is now at 7 5/8, on news that they would license their animation to WAVO. The 10k filed April 15 (late, BTW) has a going concern qualification by the auditor, indicates they are just about out of cash and must raise $15 M to stay in business. Market cap is now $100 M, which puts it at a PSR of 10 on TTM, and this PSR would be higher if you adjust it for business lines discontinued in 1997. Other fun stuff in the 10k: shareholders equity is just north of zero now. The CFO quit Feb. 28, presumably during the 10k preparation.

To: Dante Sinferno who wrote (480)	5/11/1998 8:10:00 AM
From: Q.	Respond to of 709

all: GTAX might have its warrant call soon -- I called the CFO again, after a month since the last time, and he told me that they expect to get comments from the SEC in a few days, and they are hopeful that they will soon thereafter have the shares registered so that they can then do their warrant call. They are still hopeful that this will happen without their filing another SB-2/a Since we last discussed this one, it has gone up from 14 to 24, and up from about 2 a year ago. The p/e on trailing earnings is now 74. (It's only a multiple of 36, though, compared to analysts' estimates of earnings for the FY ending 6/99, so maybe this isn't an extreme nosebleed valuation yet). The 500 k shares that will be created in the warrant call represent 24% of float and 5 days of volume. Here's a link with a chart etc: quote.yahoo.com