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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU) -- Ignore unavailable to you. Want to Upgrade?

To: Terry T. who wrote (11553)	7/28/1998 4:05:00 PM
From: BlueFox	Read Replies (1) \| Respond to of 18444

My analysis differs only to extent I say we place less emphasis on current stock values, because of weird way the take over has been effected without price support for ZULU stock, and look at underlying investment value or asset value as an "alternative" way of comparing values. Terry, while I agree with your thought train in the attempts to value this deal, the one issue I have is that you've made a basic, but unprovable, assumption to build from: ZULU is a fully viable entity, and ESVS is a worthless shell. ESVS has at least been reporting, and has at least two viable business divisions. We've heard nothing from ZULU, and can only go on past information. It's hard to make any valuation without making some wild guesses because we have no other information. For all we know, ZULU may be in dire trouble, and this deal may be a lifesaver for it. We've heard about technology, but I, for one, would be more comfortable if this technology was in use and available to see. From the domain listings, ZULU does not even appear to have it's own network online as Doubleclick does. This doesn't preclude them from having co-located servers, but if they really are a large internet technology company, and not just a simple ad broker for networks with their own technology (like Netscape and other "blue-chip" clients tend to be), it would be comforting to see that they had a larger presence online. Another thing to look at in your valuation might be the recent ESVS filing where they listed ZULU's A/R as 1.4MM. Given standard 30-45 payment terms (and assuming no overdue accounts), it would put current year estimates (based on one small snapshot) at 12-18MM. It's a weak estimate, but then most are right now. BF