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Technology Stocks : MicroStrategy Inc. (MSTR)
MSTR 539.71-2.9%Jul 23 4:00 PM EDT

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To: Glenn Petersen who wrote (682)8/2/2001 12:07:54 AM
From: Jay Fisk  Read Replies (1) of 712
 
A couple odd items that need explanation:

1. How did the $25 million in restricted cash get tapped? Wasn't that supposed to stay with Strategy.com?

2. They claimed a $25 million gain in litigation settlement. In the past, litigation stuff was not part of the pro forma, but I guess since it's positive, they'll throw it in.

3. They claimed an additional $11 million for refinancing the Series A preferred and $18 million for conversion, resulting in a net loss of $5 million.

Now if we really took out the one-time items:
$25M litigation
$11M refinancing
$18M conversion
That's a total of $54M in earnings adjustments that only occur once. Adjust accordingly, and the quarterly loss is around $60M.

Considering revenues were $49M, they've got a long way to go to making money.

Burned another $30M this quarter. It's not looking pretty.

For all the longs: I can't see how you consider this an improvement. These guys are doomed. Do you really think the current valuation of $300M is justified? I don't think MSTR is even worth the amount of debt they currently have.

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