Elliot: Thanks for your comment and the question on the happy prospect of a dividend of DRIV shares to TSQD holders. For the reasons below, I give it small chance of happening. But your question raises a more interesting conundrum: if you are Joel Ronning, how do you keep TSQD in the limelight, to maximize its value, once beyond the DRIV IPO?
If the DRIV shares in TSQD were distributed, the remaining Mac mail-order business would be of little interest to the market and share values would surely return to pre-DRIV levels, i.e. 40 cents per(?). It is the possibility that this could happen that accounts for part of the value the market places on TSQD at any point in time. The realization, as in so many things in this wonderful life, would remove the enticement.
Also, remember that Mr. Ronning likes to sell some TSQD from time to time. This capacity has provided him with meaningful liquidity over the past year. I expect he will want this to continue for some time, especially since his own DRIV shares are, I believe, presently unregistered, and largely in option form.
Finally, as I discussed in an earlier post in July, all TSQD optionees would want to exercise their options prior in order to maximize their pro rata portion of any DRIV distribution. While this would provide funds to TSQD for the payment of taxes due on the conversion of what is now an option in TSQD to buy the DRIV shares from Ronning, it would substantially dilute the DRIV share distribution ratio for outsiders holding TSQD (us), creating some need for explanations and risking some shareholder unhappiness.
All in all, not something you would likely do if you were Joel Ronning. The question for him, then, is how to keep TSQD in the picture so as to assure its proper valuation by the market, given its continuing ownership of 3.2 million DRIV shares. The first thing that comes to my mind is upgrading its listing to NASDAQ. The rules for such listing are not clear to me, but whatever shortcomings TSQD suffered in terms of financial standards previously, should be cured if it could book ownership of the DRIV shares. This, again, would raise the problem of how to fund the resulting TSQD tax liability upon the exercise of the Ronning option to TSQD, without forcing TSQD optionees to exercise, etc, per the above. A NASDAQ listing would greatly enhance the stature and the awareness of TSQD in the marketplace. Would you agree? Any other ideas for promoting TSQD?
Cheers, David |
