Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : ocom breakthrough technology -- Ignore unavailable to you. Want to Upgrade?

To: Q. who wrote (465)	7/7/1998 2:24:00 AM
From: chester lee	Read Replies (1) \| Respond to of 994

<<The situation bears much in common with PNCL about 18 months ago, when there was turmoil in the executive suite, a product that was badly delayed by technical problems and then never sold very well in the face of strong competition in a rapidly evolving area (in PNCL's case, removable storage), and discounted convertible financing that became increasingly insufficient to carry the company as the market cap slid, creating severe cash problems that led to layoffs, which exacerbated the whole problem. PNCL's chart etc. can be seen at quote.yahoo.com; Actually this situation reminds me of BBTK, broadband technologies, for the period of between Sept 97' thru Jan 98'. There was a board dispute and subsequent lawsuit. I shorted because of the weak industry, and BBTK's very weak financial and large losses. I don't recall if there was any convertible financing deal. The trend that works well for as a short just from looking at the link below, is: 1. Large negative EPS. This tells me the company is burning cash, and is in need of a cash infusion. 2. Company's stock price is in a downtrend (the trend is your friend). 3. Company is cash starve, ala PNDA, BBTK and OCOM 4. A development stage company, usually means no finished technology to sell, or not enough sales revenues to overcome the large negative cash flow. ALso, being a development stage company limits their ability to raise capital, forcing the dire need for discounted convertible financing to off-shore sharks. I have yet to know a company reverse itself, once they go down the discount convertible financing path, with the exception of PPH, IFCS and CARN who bought back their convertibles, and CDRD who never who continually renegociated the terms. Recall, IFSC rebounded nicely from 4-ish back to $8 after they called off the DC financing. They subsequently tanked because their clinical phase III fell apart. quote.yahoo.com I am short OCOM for the following reasons: 1. I am anticipating a dilutive financing deal. 2. You and Roger make good arguments on being short. 3. They issued a press release stating their technology does NOT work (to date), with a large layoff od 1/3rd of their workforce. I assume at some point they will work the bugs out, but not in the next quarter. Roger is right, layoffs has a way of focusing people away from their task at hand, only to spend time wondering when their turn will come. Most people will be working on their resume and job searches. Their sick leave count probably just tripled, as the remaining employees don't want to let that go to waste. chester