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To: Whoomi Tellalie who wrote (13)	8/5/1996 12:54:00 PM
From: seth thomas	of 3033

Something is seriously wrong with your numbers. Do you think VNTV will have a net income of $660,000 or $6.6 million? At $660,000, that will be substantially less than last quarter. In the quarter ending June 30, they posted after tax earnings of $.25, or about 3.25 million. This company has shown steady growth. In start-ups, I don't look at trailing earnings, since they are incurring all kinds of start-up expenses, revenue hasn't stabilized, etc. I think VNTV should have forward looking earnings of $2.00/share over next 2 months. That's only double. At a very reasonable P/E ratio (for these types of companies), of 40, that gives us $80 stock price. If they grow 50%, and P/E ratio is 50, then we are talking 75. If they grow 50%, and P/E ratio maintains at 60, then it's 90. If P/E ratio drops to 50, and stock grows 20%, then its the stocks at 60. So where's the problem? BTW, I own 75,000 shares of VNTV, bought at avg. price of 12. So, I ave seriously put my money where my mouth is. I am not a professional investor, but I made some money on other investments, and I was at IFMX when they went public, so got a nice nest egg together. I was just an employee, not an exec or anything. I also am active board member of 5 or 6 little start-ups. I own 1.5 million shares (.05 each) of one, which is currently valued at $4/share by VC, and may go public next year at 15. One is a total write-off (but only have $10K invested) and the others are progressing. So, I am good at this.

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To: seth thomas who wrote (15)	8/5/1996 5:50:00 PM
From: Whoomi Tellalie	of 3033

Hi Steven, I said $6.6M, which is what I used in the EPS calculations. For forward EPS of $2, net earnings would have to be ~$25M in the next four quarters. I'm skeptical VNTV will achieve this, based on my knowledge of this market segment. I believe VNTV brought in revenue into the last quarter from the current quarter, and while they still have some deals in the pipeline they are now getting into serious discounting wars with their competitors. This will have a dampening effect on earnings growth. Don't get me wrong. I think VNTV (and SCOP, which I notice you also like) will among the survivors, but the market segment is crowded in the near term there will be pressure on the prices of VNTV, CLFY and RMDY. ATEA and SWRT are where they should be for now. SCOP is a weird one, I think it should be a lot higher based on its products, but they haven't done a very good job of selling themselves to the analyst community. I guess we'll have to agree to disagree on VNTV. Let's check back in 60 days.

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To: Whoomi Tellalie who wrote (18)	8/5/1996 6:53:00 PM
From: seth thomas	of 3033

On what do you base the statement, "I believe Vantive brought in revenue into the last quarter from the current quarter" and what do you mean by that? Regarding earnings: OK, I see that you mean earnings have to average $6.6 MM per quarter for $2/share. But, if earnings hit $6.6MM for the qaurter ending Sept. 30, the stock price would blow through 100. They only have to go up 20 - 25%/quarter (linearly, not compared to same quarter year before), and the investment community is thrilled. I believe VNTV has a strong backlog. They can't keep up with the demand for professional services, despite adding more people as fast as possible. They are hiring sales people very vigorously, also a very good sign, and their international distribution deals are just coming on line now. On a different note: I am new to SIlicon Investor. Most people seem rather bearish and negative. Is that your impression, or is it just based on my limited exposure so far? I think SWRT is a nothing stock and nothing company. Don't follow it for those reasons. ATEA really belongs at 15-17, so we will agree to disagree. SCOP just replaced their CFO with someone who is more Wall Street oriented, so I am anticipating an analyst roadshow soon. That alone should generate interest in the stock. Note: we do agree on that one.

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To: seth thomas who wrote (19)	8/5/1996 8:52:00 PM
From: Whoomi Tellalie	of 3033

Hi Steven, I came up with a very optimistic $6.6M to show that even if VNTV had really great sales I couldn't see how the price of $60 would be justified. I based this on the fact that they more than doubled their sales from the first calendar quarter this year to the second. In reality it will be as you say: they will probably go $4.5M, $5.5M, $6.75M and $8.1M, if they are to get to $2.00 forward EPS. I think this is pretty aggressive and optimistic. I expect to see a slowdown in enterprise customer information system purchases, as word gets out that these things are not all that easy to implement and effectively use. In other words, people will get out of the "let's get the new toy because everyone else has one" into "what's this thing going to do for us" mode. What I meant by "brought in revenue..." was that they discounted some deals to close them last quarter, rather than work them a little more and close them in this quarter. I heard this from the salespeople of other companies in this segment; of course they lost the deals and there may be some sour grapes here. However, I know these people and I'm inclined to believe them. I agree the VNTV backlog is strong, especially in professional services. To meet the demand for these they will probably have to make increasing use of outside consultants, and this will drive down margins. Re SI bearishness: that's not the impression I have of the discussions here. I've run into all kinds of opinions. I tend to be conservative rather than bearish, and want to hear facts and basis for assumptions before making up my mind. The discussions that get to me are the ones that make amazing assertions without giving any of the reasoning behind them. I will take another look at ATEA, but I think (to date) their acquisition of Bendata has not worked out and it's not clear to me how they will climb out of their hole. I've never run into situations where ATEA competes with VNTV and/or SCOP, but I've seen some where CLFY has beaten them. I applaud you for being up on the SCOP CFO change. I too hope the new CFO is pretty good; let's see what she can do for the company. What are your thoughts on CLFY? They have a pretty broad product suite and seem to win a lot of deals, but their product is notoriously difficult to implement and use. Reply under the CLFY thread (a few weeks old).

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To: Whoomi Tellalie who wrote (20)	8/6/1996 12:35:00 PM
From: seth thomas	of 3033

I agree regarding the Bendata/ASTEA thing, but I think they can get through it. It wasn't a "bet the company" acquisition. I do agree that CLFY and ATEA compete. CLFY is a better company and probably a better product, but it is very, very hard to implement, like SAP. Again, I wouldn't buy ATEA at 20, but it's too cheap to pass up at 8. Regarding VNTV: current analyst estimates are for earnings of $.65 for 1996. $.36 is the estimate for the quarter ending in September. Actually, the numbers don't make sense, since that will give them a total of about $.65 for just the first three quarters. But, let's say the results are $1.00. $2.00 per share would make the stock go wild - to 100. A 50 P/E is completely in line with other software stocks of this size/maturity/type of business. VNTV is currently supporting a P/E of around 75. So, you figure it out. Just remember, your friend steve told you its still a very reasonable buy at today's price of 47. I seriously doubt VNTV discounted deals to bring them into the quarter. Since they exceeded their number by so much, there was no motivation. This sounds like total sour grapes. More likely, they discounted them to close the deals, regardless of timing. But, you have to know, that this discounting at the end of a quarter is a well known game. I've done it many times myself. You jack up the prices, and then give a big discount. It's totally factored into the quarterly battle plan. You may believe what you select to believe. There's probably no worse source of info than the losing sales person. Some day we could meet over lunch, and I could give you much insight (15 years worth of software sales management in small and medium companies) as to the psychology of a losing software salesperson. There are many factors that are in place: ego, fear, embarrassment, anger and poverty. Losing salespeople have to justify to themselves, co-workers, spouses, friends, etc. why they lost, because they can not accept that they screwed up, or that they work for a company with an inferior product. There's an entire belief system at work. I have worked with salespeople where the reason for the loss is unbelieveably obvious (i.e. they screwed up, didn't get positioned, missed a customer requirement, were too arrogant, or any of a number of other items), yet they refuse to accept that they themselves were a critical factor. Hey - that's unique to salespeople, either. It's just easier to track and measure. current

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To: Richard Lu who wrote (22)	8/7/1996 12:05:00 AM
From: seth thomas	of 3033

Although the volume today was relatively low, the volume for the last month or two has been significantly higher. I think 2 or 3 days ago, the volume was 500,000 shares, for example. Most days it's in the 100 -200K shares range. By the way, your observation that, "some players manipulate this stock and push it up so as to make money" suggests an unbelieveable level of naivete. That's what happens to virtually EVERY stock when one of the big guys gets interested in playing it. Also, the VNTV projected P/E is more like 60. Hey, it's no skin off me when you miss this ride. I think we'll easily see 55 - 60 within 60 - 90 days. At that poinr, I would indeed take a closer look.

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