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Post of the Day
August 12, 1999

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Subject:

Re: Heading south???

Author: BeLkMike

I have no objection to a balanced analysis on the prospects of any company. In this case Hearne made a series of negative statements about NITE's prospects without any facts to back them up.

For example:

Extremely low trading volume and modest price movement today.

Not true. NITE was up 6.2% on 6.1 million shares. NITE trades 4.6 million on average. Nasdaq was up 3%.

Much selling into each attempt to rally. People taking the opportunity to bail out. That's called distribution!

NITE was still up 6.2%. I guess more people were buying than bailing

I'm also concerned about the sentiments posted on this board. Lots of cheerleading here and too many NITE enthusiasts.

Sorry but you can't fight human nature. People who invest in NITE frequent the NITE board. They all have invested in the company because they feel it is a good investment. Longs attempt to justify their investment, just as shorts do.

Why don't you guys expect a huge disappointment when NITE releases its next earnings report??? Volume has been lousy. Earnings if they exist at all must be shrinking dramatically from the last quarter.

This is a very strong statement. Do you have any number to base this on? Are you talking about sequential growth or yr to yr? We are only 40 days into the qtr and July OTCBB was not so bad for a summer month.

Market makers depend on client firms for their business. Those client firms depend on a "book" of retail investors for their business. With huge losses from margin calls, with droves of retail investors heading for the exits or being thrown out, that "book" of traders is probably somewhat suspect as the framework for a business model that depends so completely for its "growth" on an unprecedented frenzy to invest and speculate and gamble in the stock market.

Once again this is a very strong statement. The Nasdaq is only 10% off its all time high. There are some stocks including NITE that are down way more. So the only way your margin call Armageddon can come to pass is if these frenzy investors all bought CMGI, NITE and AOL at their highs on margin. I don't think so. I believe that most of these margin calls are against some big winners on these stocks who have now given back some of their gains. Remember some of these stocks that have really been wacked are not marginable or marginable at reduced rates. Trading is an addiction. This setback pales by comparison to what happened in Oct. They came back then, they will come back tomorrow.

Past earnings growth is useless to the stock price which is only based on anticipated earnings growth. Where is the future earnings growth in a market where the trading volumes are steadily in decline???

Another overstatement. Lots of 1 billion share days in the last two weeks. If this is true then EGRP, MER, SCH, NDB etc.. are all in serious trouble. It is more plausible to believe this is a summer slowdown and business will pick up soon. Volume has been increasing for 60 years. Sorry couldn't find a historical volume chart for the DOW.

Where do you guys get your figures on the PE ratio numbers??? Hey, if the earnings get cut in half - which is probably most than likely - what will happen to your PE ratio calculations then?

True if earnings are cut in half then the P/E will only drop from 29.66 to 28 at the current price of 32 1/8.

Think critically! What tangible net assets does NITE actually own??? The foundation might be very shaky. They may all go out of business.

They have better trading systems than the competition. Dell has better process engineering than the competition. EBAY has an incredible base of buyers and sellers. AOL has 20 million dedicated users. All pretty intangible, but all more valuable than the 50 or so assembly plants GM has sunk billions into. This is the information age, intellectual assets are more valuable than physical assets.

Mike