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Microcap & Penny Stocks : MDI Entertainment (MDIH) -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Jens Tingleff who wrote (359)	4/21/1999 7:39:00 AM
From: Gator	Respond to of 563

That's the frustrating thing about MDIH's news releases. They always leave out critical details, such as what it means to the company. I like the company, but Safferin and his PR team don't have a clue as to how to work the market. Gator

To: Mr. Jens Tingleff who wrote (359)	4/21/1999 10:42:00 AM
From: myelin2	Read Replies (1) \| Respond to of 563

Hi Jens you'r welcome Manfred

To: Mr. Jens Tingleff who wrote (359)	4/24/1999 9:33:00 PM
From: Timothy R. West	Read Replies (2) \| Respond to of 563

The news means they make a little bit of money. What is interesting to me is that they haven't generated much follow-on international announcements... that means they are throwing their money down the drain on their international business. My philosophy: concentrate on what you do best and dominate, then let the foreign business come to you effortlessly. MDIH hasn't dominated yet. Let's keep watching them. I have noticed one pattern in this stock since I've been aware of MDIH and invested in MDIH since the spring of 1998. MDIH tends to peak just after the earnings release date, and then MDIH drops sharply. Check out the chart for yourself and see if you see the pattern too. I FEEL the pattern, especially helpful is when volume dries up after the release of news, then it falls slowly and persistently until it retraces most of the gains made on the eps release. I hope MDIH goes to $2, but I expect that it will be a wild ride to get there and another year. Plus, we need to see how stable their new revenues are. In other words, does the company get a long term customer with a contract or does another company come along and take its business or does the customer cancel the contract due to disappointment over the results. All we have now is sales, but not an understanding of the 'end results' or 'happiness' of the customer. I don't know if MDIH is comparable to Gillette where they give away the razor and sell razorblades forever (hugely profitable, and NON-cyclical) or are they like Apple Computer where you sell a computer at a high price (not all that profitable, and highly CYCLICAL), then you have nothing else to sell them and no continuation profit. My sense is that MDIH is a little of both, but more of the latter (Apple's business model). Jens, I guess I'll have to do more research to find out how much money MDI gets for each ticket printed. If you assume 1cent/$1 of face value, then they only make a tiny amount of money. If you assume 10cents/$1 of face value, then they make $2 million in revenues. I'm aware of a 20% gross margin for MDIH, so $2 million in revs should lead to $400k of earnings and (7 or 8 million shs o/s?) means 5 cents to the bottom line (or 0.5 cents if they make only 1cent/$1 of face value of ticket). I'll venture that they get somewhere in the middle of this 0.5-5.0 cents/share earnings estimate. Let's say 2 cents in earnings to be conservative. That means an additional 10 cents in value to MDIH, using the typical 5 times earnings that MDIH has traded for since I have followed it. Just my analysis. Tim West