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Technology Stocks : Equinox Systems (EQNX) -- Ignore unavailable to you. Want to Upgrade?

To: HeyRainier who wrote (532)	6/22/1998 7:07:00 PM
From: Dragon	Read Replies (1) \| Respond to of 765

I am also in agreement with you that the damage could have been less (30% is a fairly typical hit for earnings pre-announcements) had the announcement been more timely. As it is, we are looking at about a 55% haircut in a week on what is reputed to be a 6 or 7 cent (my interpolation) shortfall per share, for one quarter, on a float of what- 5 million? Which adds up to about a $43- 45 million market cap loss (8 3/4 points times 5 million shares). All because earnings are being reduced by about $350,000 for that same quarter? (7 cents times 5 million shares). I don't know- maybe this is a screaming, raging buy, or else there's more to the story. Interestingly, I received a call from a very beaten-up Mark Kacer at about 4:30, in response to an EMAIL I had sent after the company's announcement. I'll give him credit- he's been fielding/returning many calls and did manage to spend as much time as was needed (20-25 minutes) discussing the situation with me. Much of our discussion appears to have been in line with what you reiterated from your talk with him earlier. They still seem reluctant to admit that word could have leaked last week, (despite very incriminating chart evidence), or that they even knew there was a problem until very very late last week. He was out of the office Friday, evidently incommunicado, when things really started deteriorating, because he and Bill Dambrakas couldn't develop a strategy for addressing the crisis until late this weekend. Perhaps. But the tape doesn't lie. Period. And the tape was talking by last Tuesday. They continue to have high confidence in their technology, their biz plan and their ability to execute, as well as their competitive strengths (mostly vis a vis Digi). They are still considering returning to their buyback program (have about 600K shares they could buy in still).They think the OEM problem is transitory and that over the long haul OEM will contribute nicely to the botton line. I don't know what else to say. This is one of the worst I've ever been involved in, and there's no doubt in my mind that it could have been handled more expeditiously and with less pain than it was. And can things get worse? Oh yes, and I was frankly not particularly impressed with that small bounce near the close. But this is a small, historically well-focused company which has shown an ability to compete effectively. I figure I might as well stay around for the next act; it would be nice to see a base start to form around this level, confirmed by volume, and see where earnings come in.