S A ADVISORY February - March 2000


S.A. Advisory
2274 Arbor Lane #3
Salt Lake City, Utah 84117

The Internet Bubble Portfolio
Symbol Sale Price Current Price G or L
UBID 84.125 27 1/4 67%G
EBAY (3 for 1) 98.79 150 49%L
AMZN (3 for 1) 53.125 62 1/16 17%L
AOL 117 64 3/4 45%G
EGGS 68 13 1/4 81%G
NSOL (2 for 1) 72.37 271 5/8 275%L
YHOO 247.50 352 41%G
PCLN 111.50
July 6 99
63 1/2 44%G
Sept 6 99
51 13/16 36%G
SCMR 250
Nov 15, 99
280 12%L
EXDS 138
Jan 23, 00
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The House of Cards

Our next internet masterpiece to be added to our list of overbought, overpriced, over-recommended and just plain over hyped stock is EXDS. The company basically builds internet data centers for servers used obviously for the internet.

The overall valuation of EXDS is beyond belief. At present the market cap is a staggering $21 billion, while revenue for the 9 months just ended equaled a mere $140 million with exploding losses of $72 million. Everyone on the street boasts that the company is growing by 60% annually; in addition, the average idiot analyst is calling for - .64 loss for Dec. 99 - .51 loss for Dec 00. Out of 26 analysts 16 have EXDS rated as a strong buy and 10 rate it with a buy!

The major firms always follow the leader and never stray from their peers. Main reason they want investment banking business. We at S.A. Advisory are amazed that every firm from here to Mars loves this stock. In reality, they are duping their clients. The company lacks any fundamentals. As of the September 99, the book value is .14, the price to book is 915x and the price to sales is 126. This stock, in our opinion, is going to go atomic one of these days. The insiders have been running to the exits for months and months. At present, there are 170 million shares outstanding, but how about all the convertible notes that EXDS has floated during the past 6 months. This company eats cash faster than the population increases in the world or trees cut down within the rain forest. One other factor: the competition is heating up - there is no patent on what EXDS does, except raise and spend hundreds of millions of greenbacks.

This is the perfect Internet stock - humungous market cap, huge losses and small revenue. This house of cards will fall hard one of these days.

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