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Excellent, informative post - thanks!
Kimberly
> -----Original Message-----
> From: Bob Fulks [mailto:bfulks@xxxxxxxxxxxx]
> Sent: Friday, October 13, 2000 7:09 AM
> To: Tom Chapa
> Cc: omega-list
> Subject: Re: What is the future of TS?
>
>
> At 9:04 PM -0400 10/12/00, Tom Chapa wrote:
>
> >Since this is the omega list, I think it is not
> inappropriate at this time
> >to ask the users of this list what they think the future of
> TS is going to
> >be?
>
> I think it is pretty clear what they think the future of TS is going
> to be. Omega has told us. From some PR material dated April 20, 2000:
>
> "The company plans to discontinue all marketing of its
> client software
> products next month in preparation for the anticipated launch of
> TradeStation.com."
>
> Their recent 10Q report refers to the old products as "legacy client
> software".
>
> Their web site http://www.tradestation.com has only a sexy demo of
> TradeStation Pro that says "Coming Soon". With Omega's record of
> delivering a usable product on schedule, one wonders how soon
> "Coming Soon" really will be.
>
> Meanwhile, the merger with Online Trading has been delayed by the SEC:
>
> "WASHINGTON -(Dow Jones)- Onlinetradinginc.com Corp.'s (LINE) pending
> merger with Omega Research Inc. (OMGA) has been delayed
> because of the
> Securities and Exchange Commission's review of a Form S-4 filed in
> connection with the merger.
>
> Onlinetradinginc.com said in its quarterly report filed
> Wednesday with
> the SEC that the federal agency has advised Omega Research that it
> disagrees with the timing of when Omega Research recognizes
> licensing
> fee revenue from the sales of its legacy client software."
>
> Their recent 10Q report shows them burning cash at a rapid rate, now
> that they have stopped selling the old products:
>
> "As of June 30, 2000, the Company had cash and cash equivalents of
> approximately $4.0 million, with working capital of approximately
> $15.1 million.
>
> Cash provided by operating activities during the six months ended
> June 30, 2000 totaled approximately $333,000, compared to cash used
> in operating activities of approximately $839,000 in the comparable
> period of 1999. The increase in net cash provided by operations in
> 2000 was primarily due to decreases in accounts receivable and
> increases in accounts payable and accrued expenses offset by net
> losses and increases in income tax assets during the six months
> ended June 30, 2000."
>
> The company has been planning on income tax refunds as a result of
> net operating loss carryforwards:
>
> "The Company recorded a benefit for income taxes of $4.3 million for
> the six months ended June 30, 2000 as compared to a provision for
> income taxes of $1.7 million for the comparable period of 1999,
> computed using the effective annual income tax rate."
>
> One wonders how the tax refunds might be affected by the SEC review
> of revenue recognition.
>
> The stock closed yesterday at a bit over $2 a share, a 21 month low.
>
> The following was posted on a Yahoo message board on 10/2/00:
>
> "While we're disappointed that this merger has taken an
> unexpectedly long
> time to clear SEC approvals, the management of both companies remain
> committed to the merger and are very positive on our
> prospects once the
> merger is closed. Our last update on timing was in our 10Q
> where we stated
> it was expected to close by the end of September.
>
> We continue to anticipate that once our S4 is declared
> "effective" by the
> SEC -- and the delays in this process are related to
> getting this final
> approval from them -- the actual merging is expected to
> close ~20 days
> later. We expect to announce promptly after the S4 is
> effective when the
> actual merger will close.
>
> Considering the many delays we've had thus far, we are
> hesitant to set any
> new expectations until we have more information from the
> SEC. But given the
> 20 days it will take to go from being effective to closing,
> we won't be
> closing this month.
>
> On a positive note, the delay in merging hasn't impacted
> the two companies
> working closely together toward the business model and
> supporting products
> and technologies (including TradeStation) that we expect to
> implement
> post-merger. If I can be of any further assistance, please
> feel free to
> call.
>
> -SMD
> Sean M. Davis
> VP, Investor & Media Relations
> Omega Research, Inc. (Nasdaq: OMGA)
> 305-485-7005
>
> The situation seems reminiscent of the "Osborne Effect" now taught in
> most business schools. This refers to the time when Osborne Computer
> announced it's new product far before they could ship it and when
> customers stopped buying the old product, they went broke.
>
> And one wonders why any company would want to switch from a business
> model where they have a virtual monopoly to one where they have
> thousands of well financed competitors. It should be interesting to
> see how it develops.
>
> Needless to say, we all hope that it all works out well and that we
> will have a great new trading platform. But I suspect that there are
> a lot of short fingernails in Miami nowadays...
>
> Bob Fulks
>
>
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