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Technology Stocks : Zapata (ZAP) -- Ignore unavailable to you. Want to Upgrade?

To: Ken M who wrote (375)	7/22/1998 1:24:00 PM
From: DanZ	Read Replies (1) \| Respond to of 1206

Ken, ZAP's 52 week low has nothing to do with whether it will trade to $10. The stock made that low well before anybody knew about their entering the Internet business. This new venture changes the company's probable multiples (price to earnings, price to sales, price to book, price to cash flow), not because of Internet hype, but because of the huge growth in earnings that this might bring to the company. Investors will pay a higher multiple for a stock when the expected growth in earnings increases and that's what we have here. The stock is in the process of a revaluation based on the new business that they have entered. It will be volatile, but I think the odds of ZAP seeing 10 are next to nil unless they exit the Internet business or total botch it up. Based on what I have read about ZAP's management team, I don't think they will botch it up so the only risk is if they decide to exit the Internet business. I don't think that is likely to happen either. The real issue is how much of their business is Internet related and how much is fish related. Since they aren't a pure Internet play, I don't think we will see the same valuation as YHOO, SEEK, XCIT, etc...but the valuation deserves to be much higher than it is. Given the volatility in this stock, there is no doubt that one can make money on the short side. However, you have to be very lucky and be willing to take profits when you get them. The valuation is so low compared to where I think it's going and there is such a small float, that the stock could literally explode at any time. I do not hype stocks nor do I condone hyping stocks. I'm simply calling it like I see it and I think ZAP will trade much higher over the next few months. Best of luck, Dan