Press Releases Speak Volumes

In 1999, a company's strategic announcements are more important than all the theory you learned in business school.
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Eureka! I have found the sexiest press release of the week, in a week filled with tantalizing press releases. It came out this morning and had the desired effect: It goosed both stocks.

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.

I was thrilled; I am long

Portal Software

(PRSF)

, one of the two companies involved.

But that's not the point.

In an era where venture capitalists are more like producers, deals are more about buzz and sizzle than about substance, and the game is about identifying hot trends and not good earnings, this one is worth spending some time on.

First, the lead of the release:

"

BEA Systems

(BEAS)

, Inc., the E-Commerce Transactions Company (TM), today announced a strategic alliance with Portal Software, a leading provider of customer management and billing software for Internet and emerging next-generation communications services."

What a delicious mouthful of goodies! Let's break it down.

First, BEA gets in a pointed jab, with a trademark yet, that it is "the E-Commerce Transactions Company." That, for the uninitiated, is the fabled B2B everyone wants. Then Portal Software hits you with a right uppercut that it is "a leading provider of customer management and billing software," which is the rage area right now.

Customer retention. Customer evaluations. Customer pleasing. Customer beckoning and calling. This is the stuff that does it.

And then the combination is complete: Portal does this magical act for whom? "The Internet and emerging next-generation communications services." Pow pow pow, right to the canvas with that one. Portal works on companies that sell DSL. It works on cable modems. It works on next-level switches. Oh man, bears take a seven-count!

The rest of the release simply fleshes out these products and makes it clear that these two companies are in the right segments of the right markets. This was one of those releases where we joked internally about which company got the better part of the release. I thought it was Portal. But by the end of the day it was nothing but BEA, and my little Portal remained stalled at around par (or 100).

In 1999, may it be remembered that these kinds of announcements -- and not return on equity, or book value, or price to sales, or internal rate of return, or price-to-earnings ratio, or quick ratios, or the multiple -- determine the direction of stock.

Now there is something they don't teach you at business school.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Portal Software. Cramer's fund also may be long or short certain stocks in his B2B rotisserie league or Red Hot index. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.