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

To: MW who wrote (1550)	11/11/1998 2:51:00 PM
From: Smilodon	Read Replies (1) \| Respond to of 3015

More clarification for MW. >>>>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.<<<<< I never said they lost $23 Million in revenue. Actually, since Brite only did a little over $13 Million in revenue in 1997, there wasn't a posibility of losing $23 million in revenue. I think other shorts have cited the company's writeoff of $25.9 million of the purchase price as meaning the revenue was "worth" $25.9 million but was not the actual amount of revenue lost. Actually, doing a little math, we can estimate the lost revenue. They wrote off $25.9 of the $35.6 million of the purchase price. Assuming the non-compete was worth $5 million, they wrote off 20.9/30.6 or 68% of the goodwill due to lost revenue. This would imply lost revenue of .68 * 13 million = $9 million. To be conservative, lets cut that in half and assume they lost at least $4.5 million of actual annual revenue. A reasonable and fair estimate, don't you think? ICTV is discussed in December issue of The Red Herring on page 158 in an article titled "Beyond sofa surfing." The magazine has a web site, but I don't have a link. ICTV is similar to the old (Colorado Springs) version of the Interactive Channel in that it uses addressable frames to download info to the user and a telephone line to send responses back to the server at the cable headend. Cost is $30 in hardware and $10 per month for 5 hours of access. It seems to run over an analog system like Worldgate, but did not discuss that aspect. >>>>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??? <<<< Clearly raising more financing is something the company is likely to try. I think the first step will be to try to get the stock price up so they can force conversion of the warrants, which is a subject you and I have discussed frequently. I certainly did not mean to say additional financing was not an avenue. I believe that is a much more likely scenario than generating enough cash to pay the debt. But, unless they have changed their story, the company is claiming they will have the cash flow. <<<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. <<< I claimed my assertions have held so far, which is clearly true. We will see if they hold in the future. And lets face it, excuses don't meet interest payments. If the digital rollout goes so slow that nobody gets deployed, SRCM is hurt just as bad as if their competitors shut them out in a broad digital rollout. You are investing in an industry as well as a company. If the industry does poorly, so will SRCM, and so will its stock. Regards, Archer