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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (8640)	5/21/1999 10:35:00 AM
From: Carl R.	Read Replies (1) \| Respond to of 17679

You are right that all these internut companies are burning cash like mad in an effort to stake out a position. I also agree that to a certain extent the winners will be those that load up their pockets with money obtained at "beneficial rates". In another area, even though EGGS has historically been very poorly run while PROG has been well run, EGGS may give PROG some trouble over the next several years because EGGS has a big war chest full of money obtained at "beneficial rates" while PROG's money was obtained the old-fashioned way (they earned it). This was one of my arguments in favor of IPOing sooner rather than later. Money can be had at very favorable rates right now, so now seems like a good time to stock up the war chest with cash, cash that assures that the company can afford to take advantage of any and all good opportunities that they see. In the worst possible scenario, say that the internut bubble collapses. (Note that traffic to the 25 largest sites declined in April). If the bubble collapse, then IPO money will no longer be available at "beneficial rates". Other competitors who have money obtained cheaply will be able to expand rapidly, while AXC will have much less room to maneuver as each venture will need to produce a positive cash flow. How will AXC charge $2500 a month for underwriters if some other site offers to provide the same service for free because the other company has enough cheap cash that they can afford to do so figuring that they will eventually make money from advertising alone? I have no problem with Mike's idea of a strategic investment from say Microsoft. The point though is to make sure that the coffers are stuffed with cash while it can be obtained at a reasonable price. As someone pointed out, we would not be where we are today if Bramson hadn't placed junk bonds in January of 1998 to obtain cash that he didn't need at the time for operations. Having cash in the bank when opportunities appear is a great advantage. And even more so when the cash is obtained at "beneficial rates". My other trading has been confined to CDN, which I bought heavily at 11 3/8-11 7/16. I still hold my NVLS and VECO. Carl