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

To: Smilodon who wrote (1551)	11/11/1998 4:13:00 PM
From: MW	Read Replies (1) \| Respond to of 3015

Archer; You make some good points but also some I have a problem with. <<<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.>>> You may never have said it but pluvia and the other shorts have and they have done so using the same tactics of misrepresentation and confusion as they have with other subjects in the past. They clearly state and imply the co lost 23 million of revenue. <<<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?>>> Yes , I agree a reasonable and fair estimate. <<<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 $10 per month for 5 hours of access. It seems to run over an analog system like Worldgate, but did not discuss that aspect.>>> Just as I thought. Not even remotely similar technologies. 1. It uses a telephone line to send responses back to the server, SRCM is 2 way digital over the cable wire. ICTV is more like WEB TV. 2. Cost 30$ hardware, SRCM hardware 0 3.Cost 10$ per month for 5 hrs access, SRCM cost will be included in a total digital offering from the cable operator along with multiple other digital applications. <<<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>>> I agree. The point is that portraying SRCM to be on life support if they don't make a ton of money next year is ludicrous if support for their technology is evident enough by the rollout next year additional financing IF required won't be difficult to obtain. I do believe however, that the IT network will provide adequate cash flow to continue operations. <<<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>>> Absolutely true. SRCM depends on the cable industry being effective in rolling out digital services. Judging from the excitement of the cable co's and the progress GIC has made with it's 2000 box, I believe the future for the industry is very bright. Whats good for the industry will ultimately be good for SRCM. Regards; mw