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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (1867)	10/9/1998 5:27:00 PM
From: Q.	Read Replies (1) \| Respond to of 2506

Dale, ENER filed its 10k. Not as bad as I would have guessed. Recall that this was one of the stocks on the low RS/neg cashflow screen. I previously posted that I had identified a couple of problems with the stock: a delayed 10k and bad cash/cash flow. The filing was delayed, but they did file today and it got a clean report from the auditor. So that didn't amount to anything. The cash is a lot higher than I expected; at $26 M it is 2 years worth of cash burn, so the cash/cash flow situation isn't as bad as I thought before. Looks like they sold $22 M of stock after their previous quarter, raising cash from a pitiful level up to something quite decent, and I failed to notice that.... that's what I get for looking only at the most recent 10Q and not looking for subsuquent news ... too sloppy in my DD. Net of cash, ENER has an enterprise value of about $35 M, instead of the $60 M or so I previously thought. I'll have to reconsider whether this is really such a good short after all. It might still be decent, based simply on the low RS and the approaching tax loss selling season, even if the liquidity situation by itself doesn't merit shorting.