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Technology Stocks : Source Media SRCM -- Ignore unavailable to you. Want to Upgrade?

To: Smilodon who wrote (1549)	11/11/1998 1:49:00 PM
From: MW	Read Replies (2) \| Respond to of 3015

Good morning Archer; <<<From the company's Q2 10Q: "Recently, a significant portion of the customer contracts purchased in the Brite acquisition have been cancelled or not renewed." As far as specifics, the lost customers included Great Western Directory, TDI and others. I don't know the exact revenue amounts, as the company has not released that data. Regardless, SRCM calls the lost business significant, they wrote off the majority of the purchase price of Brite because of it, and they have initiated legal action against IMS. FROM THE FAQ'S ON THE IR PAGE OF THE SRCM WEBSITE <<<1. Did you write off $25 million of Brite Voice Contracts? No. In October 1997, the Company purchased certain assets from Brite Voice Systems for $35.6 million. The purchase price was allocated to fixed assets, contract rights, non-compete agreements and goodwill in accordance with generally accepted accounting principles (GAAP). In the second quarter of 1998, the Company recorded non-cash write off of $25.9 million, representing a portion of the purchase price allocated to contract rights and 100% of the purchase price allocated to goodwill and non-compete agreements. This write-off was in accordance with GAAP and was reviewed by the Company's auditors. >>> The point is that the amount of actual revenue lost is being grossly overstated by you and the other shorts. Revenue lost was nowhere near 23 million $ though the amount of damages claimed might be that high. There is a big difference. <<<Yep, we have been here before. As I have said many times before, I am not an attorney nor have I had an attorney review the patents. But even if I did, I can't prove the negative. If the patents are real for anything other than addressable frames, show me royalty agreements or legal judgements. Until that time, I will go with my common sense and judge the patent position to be unlikely. >>> That is a very fair argument but it also cuts both ways. Just as you can't prove the negative neither can I. Until/ Unless someone challenges them I can't prove they are good either. My common sense tells me we would have heard something from someone if these patent claims were outrageous but I will admit this is still an unknown[publically at least]. <<<<<Name me one competitor[other than worldgate which you already dismissed] who has a DEAL with any cable operator to roll out a service that is competition to SRCM. >> ICTV is currently available in Santa Barbara, California and should also be rolled out in St. Joseph, Missouri this year.>>> Please explain the ICTV service as I'm unfamiliar with it. Is it digital? 2 way interactive over cable? If so, what cable box is being used? Which cable co is deploying it? How much does it cost? What exactly does it do? <<<I have said SRCM would not get the cash flow out of the IT Network that they claimed they would, and would never generate any significant revenues from the Interactive Channel. So far those two assertions have held. Right now SRCM is burning through their cash balance and interest payment escrow. The short argument is that this situation does not change, and as a result the company goes bankrupt. The long argument is that revenue and cash flow will improve>>> It is a little early to claim your assertions have held. Tomorrow we will see IT numbers and you KNOW the interactive channel can't start to generate revenues until digital cable boxes are deployed by the cable co's and that hasn't started yet. There you are not being sincere. Finally you miss represent the long argument slightly in that you leave out the fact that thge longs don't think SRCM has to be hugely profitable in 99 they just have to demonstrate enough customer interest and promise to refinance their debt. Why do you portray this as an all or nothing deal by the end of 99??? regards; mw