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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: CatLady who wrote (22)	8/10/1998 3:13:00 PM
From: Sir Auric Goldfinger	Respond to of 19428

Take a look at TERA as an excellent short idea. Tera Computers is just another HJMC scam and makes no sense given death of mini-super and supercomputers that started with the implosion of communism in the late 1980's. The DOD has cut back the vast majority of its spending in this niche and the established players have the existing software applications, which contrary to what the salesmen always say, these things are not Cray software compatible. The financials look like crap. The Company burns $6 million a quarter and has $13 million on the balance sheet, post the convert deal. As the S-3 says in the risk factors section, cash may only be sufficient to last through he end of 1998 (well, duh!) Venture funds Genesee and Advantage have filed to register 757,534 common stock related to the series b pfd offering, thus dilution looms. This is a Death Spiral convertible with a ceiling, but no floor-i.e. endless dilution. Ceiling conversion of $14.52/share of common, but no floor as the company can force conversion five prior trading days lowest liquidation preference of $6m for the converts leaves nothing for shareholders. Hmm- this smells like CCSI. As well there are 900,000+ warrants out there plus management has an additional 2 million options. Like all mini super development programs, TERA has consumed massive amounts of cash 52.2 million of shareholders equity ($70 million to develop the MTA system, including 19 million from DARPA- heroin addict $) to date in getting the first box out the door. The San Diego Super Computer center (SDSC) is a museum for every one of these things ever made. Thus it means nothing that Tera was able to sell them one, as the fact is that so has every other company (almost all of which have augured in). No export market to speak of, given the potential abuses for code cracking, the DOE/NSA doesn't like these things floating around outside the US. Competition comes from IBM, Sun, Fujitsu, SGI Hitachi, and Convex (HP owned), all very adept at servicing their existing customer and with vastly deeper research and development budgets. Liquidity is drying up in the stock as HJ Meyers (HJMC) has stopped supporting TERA. This thing could very well go to zero when the dough runs out. Just thought that everybody should know the above. I am definitely short this bag. All rights reserved, Auric Goldfinger.