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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: John Howell who wrote (16963)	7/31/1998 6:05:00 PM
From: Curiosity	Respond to of 18263

Am I missing something here? I thought the only way that a huge short interest could lift a stock price is if the shorts were leaving. An increasing short interest is surplus supply of the stock, and will lower the price. (help it to fall off of the earth.) see Feldstein's old argument that all successful options play acts to reprice towards real (future) value.

To: John Howell who wrote (16963)	7/31/1998 7:00:00 PM
From: Marconi	Read Replies (1) \| Respond to of 18263

Mr. Howell: I think the announcement of contracts will help to peg the value of ZITL more closely. For example, assume a $100M market cap and it will all come from the expected profits from y2k remediation. Buy a future expected dollar for a dollar now, so to speak. Assume a steady run rate to A.D. 2000, 17 months running, 4-1/3 weeks per month--call it 75 weeks, 5 days per week. For an average contract of a generous $4M, with a generous 20% net profit, or $800K per contract, that would require at least 1 such contracts a week without fail (1-2/3 per week or 7 per month). Quarter the margins for full service businesses and it hits a contract a day nominally. Even when Zitel (I almost typed Litel -- what a slip up! it was the clumsiness of my right hand) does not disclose terms, they cannot be that different from the industry -- just the common folks assumption for Zitel personnel, it is estimatable in round numbers the degree they are underperforming. And they are more than two orders of magnitude below that pace at present. I agree there may be some who rush in, but at some point the reality of contract information will stick harder and actually work to bring the stock much closer to the cash in hand as its price. Best regards,