To: James Harold Alton who wrote (17 ) 6/22/1998 4:51:00 PM From: James Harold Alton Respond to
To ALL: I called IR at HAKI today and also the transfer agent for this stock and thought I would share what I learned. First, someone on the Yahoo message BB had mentioned that the company was going to do a stock buyback. While a good idea at these levels the company says it has no plans to start one at this time. Second, the Transfer agent for Hall Kinion is Mark Taine (spelling possibly wrong on last name) phone number 818-502-1404. As of today (6-22-98) there were only 9,461,224 shares outstanding, which agrees with the market cap. shown on Yahoo and my other sources. This is an important point to me, since it shows that the company is not dumping shares on us. No insider sales are showing up either. Reading the TL today, it looked like there were a number of shorts placed, though I cannot imagine having the balls to be short on this company at these levels. (G) I asked about the companies future prospects for revenue and earnings growth and was told that the company was optimistic that earnings and revenues will continue to increase. Note that even with the downgraded earnings, the company is still expected to report record earnings/revenues for the quarter. It appears to me that the market is currently hammering any stock that is not expected to make earnings right now and HAKI is being unfairly punished, but only time will tell for sure. I could not find any other reason for the massive drop in the stocks price, other than the earnings warning, which is not even all that significant when analyzed it appears to me. It's my impression that there is now a sizeable short position in this stock and when that group gets nervous and starts to cover that we will see a real nice run. This company also looks like it might potentially be a good long term growth stock, it's past record of growth is incredible. It will be interesting to see if they can produce the continued growth the analysts will be looking for. Note that of the 4 analysts following this stock, 3 give it the highest "strong buy" rating, while the fourth rates it a "Hold". I think I'll "Hold" (and maybe add a few more shares) for now and see what the next month or so brings. A lot of damage has been done I am sure to the LT investors confidence in this stock and it's going to take a little while for that source of buying to come back online, but I'll bet it does eventually.
