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Technology Stocks : eidos--maker of Tomb Raider -- Ignore unavailable to you. Want to Upgrade?

To: THIERRY ANNEZ who wrote (1402)	10/5/1998 7:51:00 AM
From: Daniel King	Respond to of 1773

How long before we see Lara Croft movies or cartoons? It seems the Yanks will use anything that kids can relate to. Dan

To: THIERRY ANNEZ who wrote (1402)	10/5/1998 9:05:00 AM
From: Bleeker	Read Replies (1) \| Respond to of 1773

The Bank of England was too aggressive in raising rates this past year and now a global economic slowdown seems imminent (IMF has cut its forecast for GDP growth in 1999 by 1 percent). The UK will surely ease rates; if they don't it will only magnify the economic slowdown there. Unfortunately, companies are not immune to economic slowdowns: P/Es get slashed and corporate earning are trimmed as consuumption is scaled back. It will take a while for this to unfold of course but I think it will in due time. Companies with no debt tend to outperform in an economic slowdown environment. Unfortunately, EIDSY has more debt than cash on hand now after the CD purchase (although they are only paying half the portion: $23 million.) Total debt is $50 million which is not inconsiderable given the current cash position and deteriorating stake in Opticom. In the short term, what concerns me is the possibility of more write offs. I read an article in Barron's this weekend about how companies habitually use write offs and one-time charges as a way to boost future earnings or hide their inability to deliver earnings. Crystal Dynamics will result in a one time charge. And EIDSY's ($20 million) investment in Opticom which at one point had doubled now seems to have gone sour and is worth half what EIDOS paid for it. Opticom was a bad deal from the start. I think the director sits on the EIDOS board too so he basically cashed in nicely. Anyway, I think Opticom may also result in another charge sometime in the future. (I found out recently that Crystal actually has posted losses in the past two years; a much smaller one this year though.) Earnings for the July-Sept. quarter are also likely to be negative and that doesn't help in this environment. After that I think a lot rides on TR3. Hopefully, it wont be like Mortal Kombat IV which had descent sales but was not anything like the first releases. And I hope at some point EIDOS will learn how to CONTROL its costs. That's one reason why we had negative earnings (-28 cents) last quarter in spite of very strong Commandos sales. In light of the bullish press reports EIDSY issued on strong Commnados sales last quarter, I expected somewhat better earnings. In retrospect, I think those press releases may have raised false earnings expectations. I will not take them as seriously the next time around EIDSY issues one.

To: THIERRY ANNEZ who wrote (1402)	10/8/1998 10:35:00 AM
From: Bleeker	Read Replies (1) \| Respond to of 1773

Told you Bank of England would ease. There will be more cuts as the UK economy continues to cool off. Of course, it doesn't help much that the BOE--in a show of bravado--tightened rates like crazy this past year before the easing cycle which has just begun. That short-sighted and ill-timed policy I think will result in a sharper economic downturn in the UK than in the US. But it will take time for the slowdown to set in: it's not going to be a fun process.