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Technology Stocks : Command Systems, Inc. (CMND) -- Ignore unavailable to you. Want to Upgrade?

To: rainwater who wrote (485)	5/3/1998 1:57:00 AM
From: P. Ramamoorthy	Read Replies (1) \| Respond to of 1956

DE - >>>>Re.: well let me tell you'll why I will not buy more CMND. 1. There are still so many people here "waiting" for a small "pop". If they panic, the price will drop further - and there seem sufficient possibilities that will provide that: a. time makes the weak more nervous b. law-suits c. a drop in the general market d. the numbers for the next quarter will be lower. 2. CMND management must have gotten a shock like the rest of us. If they haven't it tells me they HAVE NO PRIDE in their baby and I DON'T buy that. If they have then they will do what proud persons do: TEACH the world WHO knows. So we'll hear a different tone in the next Q'. The numbers will be down for next quarter (we know that) but their message must be different. 3. I wait to see what they do with 21 mill cash. I don't need to wait for results just their actions will tell me if Caputo and Co have investors interests close to their hearts. See they may be smart and savvy - but SELFISH. Nothing for me there. 4. In the meantime, one needs to diversify one's portfolio and believe me there are GOOD companies out there that have yet to revv up their engines. Why wait for SHTle to tell me that? <<< DE - you have raised good points. I'd like to try to make sense for myself. First of all, I decided not to buy before having a chat with the mgmt and understanding their biz situation. Secondly, I would buy CMND at this level if I were to buy, because the price is less than their cash on hand - a rare situation compared with the "internet" stocks. 1. Waiting for a small pop* - Doubt it. Most people bought with greed (me included) and a lot of margin (me excluded) to cash in on the good earnings report and a possible earnings momentum like SYNT. They did hear good earnings. But, when the price dropped 50% due to heavy selling by those blessed with "offline" discussions, ordinary investors panicked and sold. Even if all of SI investors sold their holdings today, the volume would not match that sold on the day after earnings announcement. SI investors or the thread do not control the price drop. a. time makes the weak more nervous - Those that wanted to get out were already out due to margins calls, or simply a matter of disappointment or fear. b. lawsuits - law suits are dime a dozen in this business, but, nothing that will significantly affect the company or the share price. What did the company did wrong? They paid dividend to pref'd shareholders - their fiduciary duty. Isn't it? c. a drop in the general market - actually, there is a gain (about 86 points on the DOW) in the general market after the good GDP news (4% instead of the expected 3.7%) on April 30. The fear of interest rate hike is fading. Asia flu offer no more excuses. Job market is pretty tight but wage pressure is under control. Can not attribute to general market decline. d. the numbers for the next quarter will be lower - could be. But what type of information we have to rely on to make such a prediction of lower earnings? The analysts were able to predict the last qtr earnings and predict $24 share price in 12 months. The question is what has changed in that information. Who has the correct information - we, the analysts or the company? Who has the most confidence in predicting the next qtr earnings - we, the analysts, or the company? 2. CMND management must have gotten a shock like the rest of us. If they haven't it tells me they HAVE NO PRIDE in ... They surely must have been shocked but they can not be blamed (1) for delivering their fiduciary duty of paying dividend to pref'd shares (2) for pursuing non-y2k biz to protect common shareholders equity after year 2000 (3) for changing a more profitable biz model to improve shareholders' equity, (4) for not acquiring space before it's required. to safe-guard the cash on hand etc. In business, it's money, not pride, that matters. Do we want them to squander their cash on leasing for space in India before the contracts are signed? 3. I wait to see what they do with 21 mill cash. - Of course, we want to see where they will invest and at what rate of return. Even if they kept the cash in Treasury Bills, that will be a safe for 5% interest ($1Million/year or 250K/qtr on top of the $455K reported earnings last qtr, about 36% increase) at these low inflation times. We need to check their 10-Q to confirm this. Just an opinion. Ram