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To: Bert Zed who wrote (6435)	5/27/1998 5:55:00 PM
From: John Melillo	Read Replies (1) \| Respond to of 10786

Why are people suprised that the stock is NOT going up? Why should it? Although the growth in the first qtr was impressive, $8.4mm in sales is a far cry from the $10 - $18mm that was being thrown around in early January '98. Earnings of "... over a $1/share in '98" is excellent growth but it is way off from the $2/share number Derby Securities was kicking around in early January. And $.09 / share in the 1st qtr is excellent growth but it is a long way from the year projection of over a buck per share. Finally, if they do make around a buck per share in '98, and assuming NO dilution and a PE of 20 that yields only a $20 stock. There is not much appreciation for the risk. Now before people start throwing out PE's of 30 or so, look at the long term outlook. PE's of 30+ are for companies that are expected to grow considerably for the next 5 years. Alydaar will find it difficult to just maintain revenue post 2000. Sorry to spoil the party, John M.