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

To: Bob Trocchi who wrote (17220)	10/5/1998 12:17:00 PM
From: Marconi	Read Replies (2) \| Respond to of 18263

Hello Mr. Trocchi: I agree with your thinking, Compaq sales force is most interested in moving hardware and that will dominate their sales activity. Reviving legacy DEC systems should be of little interest--re: Datametrics. I remain short ZITL. It seems the last month or so trading volume has been dead--a sign the stock is more susceptible to the price rationalization (collapse) I am expecting near year end. I am also interpreting the low turnover that tax loss selling has yet to occur in any volume. I would expect to see some 1M+ volume days come tax loss selling events. People need consider this before year end. I believe the next required report from Zitel on results will be the annual in December--I think it is a few days after December options expire. That would be about the last chance for tax loss sellers to review their ZITL investment with material information and decide before year end how they want to treat their situation. Does anyone have any thoughts to share regarding the effects of trading volume, MM's, or the apparently refractory pricing of ZITL around 3? It appears to me that the price may be manipulated to around 3, but it is coming at the expense of trading volume. Both disinterested buyer or sellers. When volumes decline critically, price swings are more likely. I think some shorts are hoping for a swing above 5 to take short positions--I suspect their best hope is to buy the options and exercise them; 5 and above has no durability IMO. I do not think there will be any real and regular trading volume to be found in ZITL until the price erodes to the low 2's. Then there should be some life coming into the volumes. If there is not another round of financing at which would have to be at substantially less favorable terms to Zitel than previously, then I do not think they will have the money to make it through the first quarter of 1999. De-listing, bankruptcy, or any number of other nearly involuntary actions are much more likely at that point. Without cash, what will they do? I continue to wait and ride out positions in ZITL and other issues while the markets are starting to rationalize prices toward historic ranges of valuation. Right now, with the swings, it is a traders market, with the biggest cautionary note to stay out of ways contrary to fundamentals and go with the flow of common sense underlying all durable business, not the frenetic momentum manias as in recent times. Best regards, m