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Technology Stocks : Innovacom (MPEG), [announced single chip MPEG-2 encoder] -- Ignore unavailable to you. Want to Upgrade?

To: CAP who wrote (5462)	5/22/1998 5:39:00 PM
From: DiViT	Read Replies (2) \| Respond to of 6297

Hey CAP, I finally went and read that link... WOW. Here's some excerpts: 1. Watch out for aggressive broker sales calls! 2. Watch out for promotions disguised as unbiased information! 3. Watch out for obfuscation, confusion and pie-in-the-sky promises! But promotional literature sometimes inaccurately lists the stock as "Nasdaq Bulletin Board." Nasdaq would want you to know that there is no such thing, that these stocks are not authorized for quotation in the Nasdaq system and are not part of any major national securities market. ... Try this: Unspecified claims of "major" developments, such as a "pending" acquisition or an "imminent" distribution agreement with a well-known company, are common distortions featured in scam stock promotions. Maybe an announcement is truly forthcoming, or maybe somebody made one phone call. But it makes a more exciting story to tell, and that's all that really concerns the unscrupulous promoter or broker. 4. Watch out for weak fundamentals! Fundamental analysis is not unique to the larger-cap stocks on the New York Stock Exchange or the Nasdaq National Market System. One may analyze the financial statements of their small-cap brethren as well to gather clues of investment worthiness. It's all in the financials. 5. Watch out for excessive executive compensation! 6. Watch out for suspicious backgrounds! 7. Watch out for involvement in unrelated businesses! A mortgage processing company that becomes a casino company... overnight? A resort management firm that branches off into... cosmetics? Not exactly matches made in heaven. But they are actual examples of publicly-traded small-cap companies -- Advanced Financial (American Exchange: AVF) and ILX Inc. (Nasdaq Small Cap: ILX), respectively -- and ones that also happen to have a history of excessively promoting their stock to the investment public. When confronted with such a company, the prospective investor should ask: Why would a development-stage company, which has yet to successfully develop its primary line of business, attempt to establish a completely different, unrelated business? 8. Watch out for reverse splits! 9. Watch out for Regulation S abuses! The most dangerous kind of Reg S offerings for existing shareholders are convertible securities which can be converted into common stock at a fraction of the stock price at the time of conversion. 10. Watch out for the little things -- they can add up fast! Finally, don't forget to check the section covering litigation and investigations. The prospectus will disclose all lawsuits filed against the corporation, as well as any pending government investigations. If this section paints a dark picture, stay away from the stock.