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Technology Stocks : TouchStone S/W (TSSW)
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To: robbie_nw who wrote (3209)3/26/2000 1:12:00 PM
From: David Alan Cook  Read Replies (1) of 3627
 
ahhto2,
You are not including any investment at a favorable cost basis of the cash received from either the sale of esupport.com or the 3.1 Million the company has in cash when you calculated your NAV.
If you assume that TSSW has not invested its current cash $3.1 million and will not invest its current cash in B2B at favorable cost basis and if you assume that TSSW will not invest the 9 Million that it receives from the sale of eSupport.com in similar deals with favorable cost basis, then I can see how you came up with your NAV calculation.
I disagree with these assumptions:

" TouchStone anticipates that the $6.5 million in proceeds from the proposed sale of eSupport.com plus an investment from Phoenix Technologies of an additional $2.5 million, will provide additional capital to strengthen its new business incubator strategy as the company establishes favorable equity investments in early and mid-stage technology companies. " ( Source Company Press Release)

I disagree with your assumption that the company has not invested in other IPO positions and will not use the funds from the sale of eSupport to invest in other preIPO positions at favorable prices.

" Through strategic investments, TouchStone has been building a diverse network of Internet-based companies placing it squarely in the center of the new Internet economy. We are continually looking for opportunities that allow us to capitalize on the many opportunities this extraordinary new medium presents. This transaction will allow TouchStone to focus on what has now become its core business," said Pierre Narath, chairman and CEO of TouchStone Software. " ( Prior Press Release - Sounds like the company has made other investments with its current cash )

Further, the company remarked that the majority of their positions will be coming public this year.

" Its initial investments, which it made late last year, require a shorter time to maturity than many venture-type investments because they were made with later-stage companies that have sound and mature business strategies that were transitioning into an Internet focus rather than true start ups. Therefore, TouchStone may realize short-term liquidity from initial public offerings and achieve value appreciation and return on investment. " ( Prior Press Release - Sounds like the company has other investments that will be coming public in the coming year )

Give the company a call. Ask if they have only invested in the current 3 companies - EBLD - PRTS and SupplyAccess.com. Then ask them when they will be announcing their other positions.

I encourage other shareholders to do the same.

DC
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