Market Mania and Manugistics Maneuvering

Back to the bad old days: That's what Friday felt like, with numerous names in this column flying like happy days are here again -- which, of course, they're not. Can't help but love Cramer's line, on RealMoney's Columnist Conversation, at the end of the day: "A rising tide lifts all bubbles!" And when they get to the surface, I like to think, they pop! [Just like the bubble otherwise known as Professional Detailing (PDII:Nasdaq - news - boards) appears to have done.] Let me ask you this: Do you think Uncle Al will be eager to cut rates if he keeps seeing so many bubbles? ...

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Manumania: No sooner did my story hit Friday questioning the wackiness of Manugistics (MANU:Nasdaq - news - boards) and its relationship with VirtualFund.com (VFND:Nasdaq - news - boards) than a handful of analysts issued strong table-pounding buys on the software maker. I wondered aloud in the CC whether any analysts had even seen the lawsuit, and I heard immediately from a very good source of mine, who is very long Manu, telling me that he thinks it will "annihilate" the quarter without getting any money from this wacky VirtualFund deal. The only thing that would worry this guy is if receivable days outstanding, which have been rising, don't go down. Always fun when I get smart sources on both sides of a transaction. Fun for everybody, that is, but me! ...

Spending IT: Lots of chatter Friday about Sun (SUNW:Nasdaq - news - boards), most of which was quashed by day's end. But it reminded me of something posted on the CC last week. (Lots of good stuff, in fact, is landing on the CC and not in this column so I intend to start bringing some of it over here, if ya don't mind!) I had been talking with longtime source (and money manager) Jeff Matthews, who was just floored by the significance of what Scient (SCNT:Nasdaq - news - boards) had said on its conference call after preannouncing a lousy quarter. He seized on comments regarding the cutback in IT spending not by dot-coms, but by real companies like Chase (CMB:NYSE - news - boards) and Wells Fargo (WFC:NYSE - news - boards).

From the call: "Projects were either stopped, slowed or pushed to the right ... More enterprises have not funded projects that were considered discretionary..."

That, Matthews says, is bad for the likes of IBM (IBM:NYSE - news - boards), Sun, Hewlett-Packard (HWP:NYSE - news - boards) and EMC (EMC:NYSE - news - boards), which are heavily tied to e-commerce and other Web applications. (He's short IBM, Sun and HP.)

Add to that Maytag's (MYG:NYSE - news - boards) announcement Friday that it is refocusing its R&D spending away from Web-based and e-commerce initiatives. Maytag, it would seem, is not an exception.

As an aside, I asked Jeff how Hewlett-Packard can continue to say all is fine with the world when all of its competitors are preannouncing. His response: "Carly [Fiorina] can claim that because she's very high up on a very narrow ledge. ... the same reason Mike Armstrong won't admit he's unwinding everything he did at ATT (ATT:NYSE - news - boards)." He believes she'll be gone from the company by summer. (And he didn't mind being quoted on that, which shows his conviction!) ...

Telephoning Teligent: The concern about Teligent's (TGNT:Nasdaq - news - boards) ability to raise cash, as first mentioned here back in October, was not a question of whether it would find the cash, but what the terms would be. Now we know.

On Friday the company signed a deal that is loaded with high-priced terms and little in the way of commitment by the lender; put another way, the lender can sell its stock -- not something investors want from someone serious about saving a company. Investors will be looking closely at any SEC filings containing details of the deal to see if the lender/investor, Rose Glen Capital, can short Teligent's stock. (Not a good sign for common investors!) ...

Speaking of financings: This just in (actually, it was just in last Tuesday but I only just saw it): Hollywood Entertainment (HLYW:Nasdaq - news - boards) has paid down $37.5 million in debt due this quarter. There were concerns that the company wouldn't be able to pay it because as of the second quarter it had only $4.4 million in its coffers. The company had said it planned to make the payment from internally generated cash flow; now it needs enough money to make four more payments of an equal amount. ...

Vista on Visteon: This column has gotten lots right lately, but it also has its share of clunkers. Remember Read-Rite (RDRT:Nasdaq - news - boards)? (I'd rather not!) I remember Visteon (VC:NYSE - news - boards). It's a favorite of money manager Aaron Edelheit of Sabre Value Management. Cheap is what he said, and it wasn't that long ago that he said it. In fact, it was less than two months ago. Since then Visteon is in talks to buy a European parts distributor, and it just preannounced a lousy quarter. Aaron, I thought you said this wasn't a lemon! "For a company that is nowhere near financial trouble, with solid assets and finances, near a trough in earnings and looking towards Fed cuts, I still like it," he says. And why not?

It trades at 3.5 times lowered estimates, less than half of its book value, a fraction of sales and almost at cash value. It also has lots of debt, but, hey, it ain't about to shut its doors. That Aaron, a value investor to the core. A radiator core?! (And to think, both Read-Rite and Visteon were part of this column's attempt at not being so negative! And to think I still get emails, every day, from people wondering whether I ever write anything positive. Not any more!) ...

The FD factor: Cramer last week penned a terrific piece about how analysts have lost their edge, and how they should be more reporter-like. Interestingly, analysts hear from the same short-sellers I hear from -- they get the same tips! Yet, for the sake of investment banking, they choose to ignore the same information I have! (Can't claim you didn't know if you didn't listen!) If you ask me, that's simply irresponsible.

Finally, from the Daily Racing Form: Dan Borislow, the former CEO of Tel-Save.com, which is now Talk.com (TALK:Nasdaq - news - boards), who went laughing all the way to the bank after his controversial tug-of-war with short-sellers at the long-distance company he founded, has defaulted on $1.6 million in payments on eight horses purchased in September. According to a lawsuit by Keeneland Association, a check from Borislow for $50,000 was returned for "insufficient funds." Borislow, an avid gambler and horse owner, is also known to be an aggressive trader; it's unclear whether he got caught in the market's downdraft. (Dan, if you read this and you can add any clarity, please get in touch.)

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Herb Greenberg writes daily for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, though he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send any to Herb Greenberg. Greenberg also writes a monthly column for Fortune.