The Jailhouse

[Cassandra]

derf: I've always maintained that EDIG is a good trading stock but an abysmal long term hold. If you use charting to trade it, you can do very well.

However, the fundamentals of the company are about as bad as it gets. The gross profit on products sold over the past 5 quarters was -101%, so they lose more money by selling products than if they did nothing. It is involved with off-shore lenders and investors who have kept it afloat with mulitple rounds of floorless convertibles, loans with effective rates as high as 63%, etc. It has burned $65 million in investor cash as of 12/31/02.

My posting is to counter the touts who promote that EDIG is a good long term hold, as many EDIGers have been led to believe. Some of these touts are very likely active swing traders and it's angering to see them pumping with extremely misleading information. Yet these trader touts are heros to many EDIGers. Because they tell them what they want to hear... forget the failures of the past, the future is extremely bright.

They are scheduled to register several million more shares for the latest round of CP shares. However the holders of the those shares will assure that there is sufficient hype so that they can short them above the current conversion price of .19 before converting them. EDIGers have been trained to believe that dilution is nothing to be concerned about.

If EDIG becomes profitable, it will have so many shares outstanding (currently about 155 million with more on the way)that it would need an unrealistic P/E ration to support a higher share price.

However, if EDIG does become successful and turns out to have been a good long term hold (i.e. regaining the prices that most of the longs paid - some as high as $24.50), I will certainly apologize.