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The Night Watch: T&W Financial's Gains May Be a Fluke

Data I/O's products moves expand stock value.

It's been an interesting new year for equipment leaser T&W Financialundefined, one filled with turmoil. Executives resigned, contracts were lost, bankruptcy was filed and employees were laid off.

Not the signs of a particularly healthy company.

The Y2Kraziness started Jan. 11, when the Tacoma, Wash., company announced that it lost a lease portfolio service contract worth an aggregated $270 million, which accounted for a third of the company's lease portfolio.

The lost contract was the insult after the injury, hitting T&W in a particularly soft spot. In December, the company warned of trouble meeting operating expenses and put almost all its cash into restricted accounts for secured lenders. On Dec. 13, four executives took measures to slash overhead and reduced their collected compensation by $600,000.

Then, after announcing the loss of sorely needed revenue, T&W Chairman and CEO Michael Price announced his resignation Jan. 20. The company announced that its talks with creditors gave them a week's grace period to figure out what its fate would be.

Eleven days later, on Jan. 31, T&W Financial said it would file for bankruptcy when agreements with lenders expire. Two more executives, a board member and its CFO, resigned. The next day, T&W slashed half its workforce.

Since this last flurry of news from the company, day-session interest in its stock has shot through the roof. It has averaged 570,000 shares of daily volume so far this February, which is a massive increase for company that rarely trades above five-figure volume and has dropped 90% in the last six months.

Today, it fell 3 ticks to 27/32 on 1.7 million shares. Tonight, it rose 3/8 to 1 1/4 on 2 million shares on



Why were late-night lurkers flocking to the struggling company?

Company executives didn't return phone calls and message boards were unusually silent.

One plausible explanation was confusion.

Before today's day session,

Time Warner Telecom


released fourth quarter losses of two cents a share, crushing the estimated 15-cent loss en route to a gain of 11 1/4, or 18.1%, to 73 3/8.

TWFC was the most actively traded Island issue on zero news. TWTC rose 18% after announcing good earnings. Maybe someone out there caught a late-night ride on the wrong ticker symbol.

Tomorrow's the big day for

MCI WorldCom


. The company will release the results of its fourth quarter and judging from investor reaction tonight, the overall mood was giddy.

MCI WorldCom rose 2 1/2 to 50 5/8 on 80,000 shares on Island, bounding back from a day session loss of 2 13/16 to 48 1/8.


First Call/Thomson Financial

estimate is 41 cents a share, higher than last year's quarter, which came in at 15 cents a share.

Other large tech names rose along with MCI WorldCom.



sobered up from today's hangover. It rose 1/8 to 35 11/16 on 60,000 shares after stumbling 1 1/2 to 35 9/16. And



added cherries to today's 3-point gain in after-hours, rising 13/16 to 129 5/8 on 60,000 shares on Island.

See the light?



did down at the No. 3 spot. The company soared 1 15/16 to 6 21/32 on 350,000 shares after announcing fourth quarter earnings of 10 cents a share, crushing the 2-cent analyst estimate and last year's penny a share.

Tonight's word is "expand."

Data I/O


knows the word well, gaining 3/8 to 3 3/4 on 330,000 shares on Island ECN after announcing that it would expand two of its products.

In one expansion, the company's TaskLink software, a programming process control software enabling users to use a menu interface to program, will now include Multisyte and Optima programmers. In the other, it announced that programming capabilities for its Multisyte line would be expanded with the introduction of Flash memory programming.

This gain caps a day session rise of 3/8, or 12.8%, to 3 5/16.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.


MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter'sundefinedMorgan Stanley Dean Witter Online, Mellon Bank'sundefinedDreyfus Brokerage Services and clients of Salomon Smith Barney. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.


explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.