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

To: Dave Yenne who wrote (11146)	6/25/1998 5:36:00 PM
From: Robert Graham	Respond to of 14631

I has been a volatile day for Informix with what appears to be net selling with periods of very light volume, and volatile activity that attempted to send the price above 8 twice unsuccessfully. I think the stock price may make one more attempt at 8, but I think IFMX will move lower from here. I will check my charts this evening to verify this bias of the stock. I still have one last group of IFMX 5 CALLs to sell. I am hoping to obtain 3 for them, but I may have to settle for an unimpressive 2 7/8. My first group of CALLs went off at 2 15/16, and the second group at 3. I attempted to sell that last group at 3 1/8 at the end of the day but the stock price moved lower. An interesting note here. As I mentioned in a previous post yesterday, I saw the "ask" on the IFMX 5 CALL option move up even though the price of the stock remained the same which gave this option a premium that I have not seen before and also a wide spread. I suspect this was advertising on the MM part. He needed to cover a short position since that he found himself in as the result of writing options for option buyers as the stock went up in its recent uptrend. I was able to sell on option at this "inflated" ask price which was very unusual which IMO confirms this extraordinary situation. This is just a thought. I do not know if this is true or not, but I will be looking out for the same circumstance to reoccur and test it by writing options at the inflated "ask" price if appropriate, to see what happens. Any thoughts on this? Bob Graham

To: Dave Yenne who wrote (11146)	6/26/1998 9:43:00 AM
From: Mark Finger	Read Replies (1) \| Respond to of 14631

Dave, I understand the different situations between Informix and Sybase. What I was trying to emphasize is that if IFMX tries to pull another "restatement", that it will be viewed extremely negatively. Right now, I believe the price of IFMX indicates significant probability of recovering to true and consistent profitability, as indicated by the fact that current price is roughly 2x sales. On the other hand, there is less confidence in Sybase, indicated by their price of roughly .67x sales. However, another restatement would bring forth questions of fraud by the new management, and that should be rewarded by an appropriate price. If they are judged to be in a worse condition than Sybase, that would result in a price in the $2-3 range. The market capitalization, especially in terms of sales was the comparison basis, and the fact that I would then indicate that the extremely bleak future for IFMX. One other note: I do not think there was any fraud in 1994, and very little or none in 1995. What happened is that IFMX chose to restate its sales back far enough so that they could do apples to apples comparisons. So there was restatement. The amount of money that actually disappeared during the process of restatement corresponded to questionable actions that occurred during 1996 and 1H 97. The changes in 1994/1995 were simply moved forware and recognized at later dates. This is the same thing that happened to all 3 major DBMS companies (ORCL, IFMX, SYBS) in the early 1990's, when the SEC forced all to change revenue recognition. No fraud was implied then, and fraud should only be implied where there is specific proof. Remember that your company also has its own case of fraud (in the Japanese unit) that required restatement of $65M in 1997. One problem I see in analyzing Sybase revenue right now (for all of 1998) is that Sybase waited too long, and was not able to go back and restate prior years (a special ruling in applying the new rules for those who did not start until this year). Therefore the comparison of license revenue is not really an apples to apples comparison when comparing 1998 license sales to 1997 license sales. This can result in a worse that expected showing. I believe that Sybase has not been doing a good job on that explanation, although probably a smaller percentage of total license sales are involved (only sales through VAR's, OEM's and distributers are affected).