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Technology Stocks : 7th Level -- Ignore unavailable to you. Want to Upgrade?

To: T-Lo Greens who wrote (927)	5/11/1998 12:26:00 AM
From: lizard lick	Read Replies (1) \| Respond to of 1019

IBD after the bell coverage on,sevl, 7th level in monday's edition. Please do try, youll have that much more to cover later this week, when walt disney selects 7th level as its software provider for online site demonstrations of disney characters. LOL then you will be saying your hail marys faster than the guy auctioning off your house.

To: T-Lo Greens who wrote (927)	5/11/1998 12:50:00 AM
From: Gokhan Gezmisoglu	Respond to of 1019

Why short at 6 3/8? It's not like it has much downside, while the upside is much much more. Come again? From the financial statement; reporting a 62% reduction in net loss to $2.5 million or ($0.18) per basic and diluted share compared to $6.5 million or ($0.48) per share in the year-ago quarter. OK, lets see how they achieved this; Three Months Ended March 31 1998 1997 ------ ------ Net revenues $461,753 $4,197,836 Cost of revenues 84,920 2,666,135 hmmm, cost of revenues decreased dramatically because ... they did not sell too much! Operating expenses: Research & product dev. 1,166,216 4,587,780 Sales & marketing 350,945 1,903,345 General & admin. 1,244,318 1,600,934 Lets see, they cut R&D to nearly 1/4th of what it was, Sales & Marketing to nearly to 1/5th of what it was. Only the General & administrative expenses stayed about the same. It seems like the real employees (engineers, sales) got booted while the management stayed put. Interest and other, net (156,829) 99,112 And instead of getting interest from their cash balance somewhere, they are paying interest now. 156K quarterly is 600K annually. If you assume a 10% loan rate (with their credit rating that would be a miracle but lets just assume), we are looking at a $6 mil short term debt. IMHO this is just the tip of the iceberg they probably got extensions from their creditors. So that is how they lost less money. They cut down on the research, they cut down on the sales force, they cut down on the sales and voila! less losses! I think this is unbelievable! This was a $1 1/2 stock before investors (speculators) bid up anything Internet related to the moon. Actually looking at the financials, they do not even deserve the $1 1/2. Am I missing something? regards, Gokhan * I am short SEVL from 8 5/16. This is not investment advice. The above is my opinions only. * And to answer your original question of Why short at 6 3/8? It's not like it has much downside, while the upside is much much more. it has 100% downside potential and that is good enough for me.