Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (13477)	9/4/1998 12:40:00 AM
From: Peter V	Respond to of 18691

Roger, have a vegemite sandwich for me (because I wouldn't touch the stuff!). Hope it's for fun.

To: Roger A. Babb who wrote (13477)	9/4/1998 2:28:00 PM
From: Jonathan Babb	Respond to of 18691

Many of the stocks we have been shorting are now below $5. I have been trading mostly on Datek, which doesn't allow shorting below $5. Does anyone have recommendations for brokers that allow shorts below $5? Especially ones that can find shares easily. I am also interested in any comments on brokers that provide a short rebate for large positions and/or good institutional brokers for trading a small ($10M) short fund.

To: Roger A. Babb who wrote (13477)	9/4/1998 6:03:00 PM
From: Kip518	Read Replies (3) \| Respond to of 18691

CATP blames customers' preoccupation with Y2K for anticipated revenue decline & stock blow up today. The interesting part of the press release is that the decline puts many of the employee's stock options underwater. This has to be an increasingly common problem in most tech companies as their stocks decline. Option repricing & panic employee selling will keep these stocks under pressure for some time (much like floorless converts). Cambridge Tech sees slower FY99 rev growth Reuters Story - September 04, 1998 14:23 NEW YORK, Sept 4 (Reuters) - Fast-growing computer consultant Cambridge Technology Partners Inc. warned that project delays caused by customer concerns about the threat of Year 2000 computer issues could slow revenue growth in 1999. In a conference call Friday afternoon, Chief Financial Officer Art Toscanini said that these project delays could lead to slower annual revenue growth of between 40 and 45 percent, down from the company's traditional rate of around 50 percent. The conference call -- put together on short notice -- came in response to a sharp decline of more than $8 in the company's stock as Wall Street learned of the company's new concerns. Cambridge Technology stock sank to a new low of $27, down $8.16, as the stock shot to the top of most active issues on Nasdaq in mid-afternoon trading. The share tumble had added impact because it rendered at least temporarily worthless the value of stock options granted to many of Cambridge's 3,500 employees -- a key factor in retaining highly skilled employees that are in short demand. Still, in speaking to Wall Street analysts during the call, Toscanini said that near-term business at the computer services firm remained healthy and that he remained comfortable with earnings forecasts for the rest of 1998 and into 1999. "We see some of our clients looking at their budgets and deferring some decisions," Toscanini said of how some customers have recently increased their focus on Year 2000 repair work instead of starting on new information technology projects. While the computer consulting and systems integration firm offers Year 2000 fixes, the bulk of its business is devoted to providing new technology services, software, networking and training to a long list of blue-chip corporate customers. Toscanini said that the company has begun seeing delays on existing projects of up to four to six months and that as a result previous growth expectations for 1999 now appeared "a little bit aggressive" in light of these uncertainties. But he was confident he could meet Wall Street revenue and earnings expectations for the rest of 1998. He backed third quarter revenue estimates of $162 million to $165 million and earnings of 25 cents a share and fourth quarter revenues of $182 to $185 million and earnings of 28 cents per share. Those figures were in line with previous estimates on Wall Street, according to First Call, which surveys broker views. He said the company remained comfortable with earnings estimates of between $1.35 and $1.40 per share for fiscal 1999. The prior First Call estimate stood at $1.39 per share. The stock's sharp fall was triggered by a report earlier Friday from analyst Mark D'Annolfo of Boston brokerage Adams, Harkness, Hill who downgraded the stock to attractive from buy and lowered his revenue estimates for 1999. The stock price tumble added to declines that have cut the value of the stock by more than 50 percent since mid-July. "Our business is still sound," Toscanini reiterated during the conversation with analysts and investors. "I am just really disappointed that the market has reacted this way." "Now, with the drop, you do have a bunch of people who are probably underwater," Toscanini said of employee options to buy stock at prices that are now higher than the current market price, rendering them worthless, unless the stock recovers. During the call, Wall Street analysts questioned whether or not the recent stock declines hurt its employee retention efforts, but Toscanini said his company was on track with its hiring plans. Another analyst expressed concern that the stock decline could lead the company to re-price its employee stock options, something it had done at least once before. The CFO denied this would occur, saying, "I don't think you will see that at all." However he then added quickly, "I don't want to comment on it." Shares of Cambridge Technology rival Sapient Corp. tumbled sharply on apparent fears that the second company was subject to some of the same customer technology spending delays that Cambridge Technology had confirmed it was experiencing. Sapient stock fell more than $8 at one point Friday before recovering some to end the day at $33.87, down $2.87 on the day.