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

To: Jeff Meredith who wrote (10985)	5/28/1998 9:10:00 AM
From: RDH	Read Replies (1) \| Respond to of 14631

Jeff, I was also upset when this news broke out, but after calming down and grappling with whatever information I could get on this, I do not see this is anything that reflects particularly badly on management. I agree with what you are saying on this situation, with maybe the exception of one "suspicion" (previous post). I don't think the lawyers had any influence on this event not being explained better in the press release. I think that Informix management, decided let's just go the most conservative route possible and not worry. It is not worth the bother to explain. In the long term or the short term this has no affect on Informix as a company. Any explanation looks like an excuse, etc. Let's just move forward and concern ourselves with Informix the company. Increased revenues and profits is the surest way to increase shareholder value; let's not prolong this restatement situation by explaining or justifying -- let's use this to our advantage and send a message out that Informix is being as conservative as possible in reporting revenue. Get this behind us, for it is the last messy thing remaining -- hopefully. This event hasn't affected customer confidence -- to them it is a non-event. It doesn't seem to have affected any of the analyst's following Informix. I say this, not because their reaction is valid or invalid (on average they understand the stock market less than you, or Bob or Melissa or some others on this thread) but because in the short term (1 to 6 months) it is good to know that this is a non-event to the analysts. This hasn't affected the value of the company or the future or its potential success. One thing this does do, is reduce the Accounts Receivable entry for last quarter. This makes the cash flow situation look better. In addition, this revenue will be recognized at a later point in time, thus helping IFMX to continue to exceed analysts estimates which will probably be anticipated by investors (as happened the last 2 quarters) and we will probably see Informix run up to 10 this coming quarter before earnings announcement, and then start falling slightly before earnings are announced (it will probably start falling the same day as it has done the last 2 quarters) and then fall after earnings announcement, to some lower level, depending on the actual earnings. If the earnings are very, very good, it will probably not fall much. If the earnings are very weak, it could fall below where it is now. I love this company (they value their customers and treat them well), and am bullish on this stock, but let's keep in mind the fact that revenues are still nothing to brag about and that book value is pretty low and that most analysts covering this have only a superficial understanding of the role and potential of databases in commercial enterprises (soon we will be able to listen to any music, watch any movie, order any commodity over a future medium that is sort of like a combination of WEBTV and cable television -- not only will the movies and music be stored as digital information in a database but more importantly all transactions (OLTP - online transaction processing) and all customer preferences and choices (DSS - decision support; data warehousing, data marts, operation data stores, etc) will also be stored. We will be able to vote online, work efficiently at home, store records of phone calls and teleconferences in a corporate database. More and more of our "character" and "desires and needs" will be able to be recorded by corporations which will use this information (single customer focus instead of mass marketing) to "push" "appropriate" offers to us. Information will be kept about such "individual" marketing promotions which will bias future "individual" marketing, etc. There will be a surge in low-end databases -- no doubt -- cars, for example, will have their own databases one day, these will be true "commodity databases". Microsoft will continue to improve their database offerings, but so will Oracle, Informix and IBM. The future of Informix is more uncertain than the future of IBM or Microsoft or even Oracle. But the future of Informix is less uncertain than Yahoo or Excite or Lycos or Preview Travel or even KTEL. The way to play this, IMO, is to buy shares in IFMX, ORCL, IBM and MSFT. (This certainly makes more sense than buying shares in YHOO, XCIT, SEEK, LCOS and every other potential internet success story; most of which will have lower stock prices 4 or 5 years from now than they have today). I think we will see that 5 years from now ORCL, IFMX, MSFT and IBM will all have doubled their current stock price. I would not be suprised at a triple or a quadruple for at least two of these four. - RDH.