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Technology Stocks : DSSI/DATA Systems & Software -- Ignore unavailable to you. Want to Upgrade?

To: jtechkid who wrote (697)	8/3/1998 11:12:00 PM
From: Allen Benn	Read Replies (1) \| Respond to of 1061

We all want DSSI to begin showing its stuff, but many of your suggestions actually would be counter-productive. The $4.7 million write-off is no big deal, and in fact is a benefit to the company. The market doesn't like restatements, so on the one hand it wants to punish the company. On the other hand, the write-offs mean that future earnings will not have to suffer amortization of capitalized expenses. That means future earnings will be greater than they would be otherwise. Since the Street looks to the future, on balance the write-off will prove to be good news for shareholders. As for buying back shares to support the price, be careful about what you ask for. DSSI must horde its limited cash, and cannot afford to squander it on a buyback. If DSSI announced a buyback, short sellers would sense an opportunity and they might try to take the company down. A company with limited cash resources can no more support its price than can a country with limited reserves can support its currency. Try it and you invite attack by traders. Another option would be for Morgenstern to begin hyping the meter reading opportunity. Hyping the stock prematurely also is bad for the stock. I don't think there is any alternative but for DSSI to concentrate on getting the core businesses productive. (I agree with your assessments that DSSI should not screw around with non-core business non-opportunities.) Allen