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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (10784)	5/13/1998 1:24:00 PM
From: Mark Finger	Read Replies (1) \| Respond to of 14631

Michelle, I understand that the stock deals may have had a contribution to the low price, but cannot be responsible for more than 20%. The real reason was the reason that the deals had to be made--Phil's mess and all the problems that left them short of cash to keep the company going. Because of the date, I suspect that the Fletcher deal was set up by Phil and his crew, back when the price was $9-10, before the Q2 announcements were made and the restatement. The latter was what drove the price to $4. Incidentally, the original 8-K was dates 8/25/97, and the PR about Fletcher was issued 8/13/97, more than a month before the decline from the $8-10 range. The December Edgar filings were filed to reflect the changes due to the restatement completed in November. Mark

To: Lizzie Tudor who wrote (10784)	5/13/1998 1:29:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 14631

I think it would be a little difficult to manipulate the float IFMX has in the market, unless the stock is trading at very low volume and there is no nearby support where significant buying interest would step in. This may be the case in the current situation and investor sentiment. But I would not see this as a "given" just because there is convertable preferred available. So Informix has been surviving through the cash generated by the sale of land and the private placement of convertable preferred. This explains some of what I saw in a quick glance at their 4Q financials. What is very important here is the reasons the company resorted to using convertable preferred: their credit with commercial institutions is not available, as it once was. There are significant costs associated with any turnaround effort. It is difficult for a startup company to obtain a loan and the needed cash to build and grow the business. A turnaround of an existing company can be made or broken on cash flow alone. In the case of a company having no access to additional credit, the turnaround becomes IMO very difficult at best. Now I understand why Bob F is pursuing a "survival mode" cost focused type of strategy. I still say if he remains stuck in this approach to business, he will not be aggressively pursuing sales in a timely fashion which is essential to any turnaround effort. I think their present credit situation definitely changes the probabilities of their turnaround efforts, most certainly in being able to deliver short term results, and likely has impacted even the chances of their future success. I bet if the books were not "cooked" in the first place, Informix would have found commercial institutions more willing to lend them additional funds. Phil White has damaged this company in ways that will continue to have its effect surface for some time to come. Does Informix still have their line of credit that can help see them through some of their short term cash flow needs? I do not see how a comapny can survive in even a steady-state mode without available short term credit little alone a turnaround effort. Also didn't the CEO in the conference call indicate that the company for last quarter reached a breakeven point on their operational cash flow? Finally, what is the current book value for this company? This will help determine the position the tunraound players may take that came in when the stock was selling for 5 and above, during this mini-rally from 5. Once again, I believe this company will take some time to "turn around" which at some point in time in the near future will become reliant on their ability to aquire additional credit to fund their turnaround efforts. So even if they cannot report a nice earnings figure for the public investor, they must be able to convince banks by the next quarter that they are credit worthy. Once credit favor is taken away, it is usually very difficult to get it back. Bob Graham