Herb's Hotline: No E-Stamp of Approval

Flash: At yesterday's Bear Stearns investment conference, according to my spies, tech fund manager Paul Wick of J. & W. Seligman (on a panel with Cramer, who wasn't my source for this info) was asked which stocks in his portfolio, that sell for less than $5, he really likes. According to several observers, however, he discussed what he didn't like: E-Stamp(ESTM), the Web stamp company that has big stakes owned by Microsoft (MSFT) and AT&T Ventures. His comments were along the lines that he can't currently sell it because it's restricted, but when the restriction is off he will sell it before it goes to zero. When last seen it was trading at 2 21/32. Wick couldn't be reached for comment. ...

Flash: Lousy, just lousy, earnings out of IDT (IDTC) (our old friend) late Wednesday -- yet you wouldn't know it from the stock, which was recently trading up 3. The earnings press release was as convoluted as ever and the company touted the billion bucks it's expecting to receive from stock purchase deals with AT&T (T) and Liberty Media(LMG.A). "At a time when some of our competitors are experiencing financial difficulties," CEO Howard Jonas trumpeted, "we will be able to proudly point to our outstanding financial condition, featuring over $1 billion in cash and virtually no long-term debt.'' Boy, he had better hope that neither of those raise the same questions the shorts have raised all along about IDT's deteriorating biz model. (Messy margins!!) There are still plenty of shares sold short, but the possibility of a billion bucks coming in (cash is king) is still enough to send plenty of other short-sellers headin' for the hills. ...

Flash: Tuna in a pouch? That's the big news out of H.J. Heinz (HNZ) this morning. Faber and Kernen were joking about it on CNBC's Squawk this morning (very funny, guys) but I really do think this is a big deal. The Greenberg household has tuna sandwiches (chunk light) at least once a week; I'm the chief tuna-salad maker (light mayo, celery, pepper and lemon) and I really, really, really dislike opening tuna cans and draining the water. Just hate it. Squirts everywhere and it stinks. Hooray for Heinz. ...

Flash: Plenty of chatter here in recent days, in the wake of my item on Optical Cable(OCCF), about whether companies should invest in the stock market. One of the most sensible opinions came from reader Jason Cutler, who invests in Adobe Systems(ADBE), which has a venture-capital-like fund. "For my money," he writes "there's no way I could pick imaging-related companies -- public or private -- better than Adobe."

And that's fine. It's also not the beef this column has had with Optical. The only beef was that the company was touting a 37% gain in earnings. What it didn't say in the press release -- but does say in the latest 10-Q, filed yesterday -- was that the entire gain came from investment gains. What's more, it added a few words to this quarter's disclosure to point out that the investment gains may not be recurring. (Which is why investors should view them as cream, not part of real earnings.)

But wait, there's more: The Q also discloses that in addition to investment gains (and this is why razzle-dazzle investments by a company aren't necessarily good) the company had an unrealized loss for the quarter. It says the loss was included in the net income. Easy come, easy go. But how can they have both gains and losses in the same quarter if all of the money is invested in a single index fund? CEO Bob Kopstein still hasn't returned my call from yesterday. ...

Finally, from the "go ahead, make my day" department: S. Martin writes: "Because you are not an investor and have no money in the market, we do not and will not read your columns from this day on. You are not believable since 'your sources' provide you with info. If you would put your money where your mouth is, your columns would have a different slant. You are not believable." Let me guess: an investor in Optical Cable and/or Cyber-Care(CYBR)? Doesn't really matter because that's it for this edition of ... The Hotline.

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Surviving and Profiting in Treacherous Markets June 28th, 2000, Marriott World Trade Center, New York City

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