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Technology Stocks : TouchStone S/W (TSSW)

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To: David Alan Cook who wrote (3211)	3/26/2000 10:01:00 PM
From: robbie_nw	Read Replies (2) 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:> David - I am not assuming that TCG has not invested in any more companies. I simply do not try to read the future based on a couple of positive events/investments. (I still think I'm being generous by using todays full market value of TCG's holdings..although there is risk of those holdings depreciating before TCG can even realize a gain) Based on TCG's statements...I think that they HAVE invested in addt'l startup companies. I recognize the potential of these add'l investments...but potential is not something you can spend. You seem to ignore that this potential also comes with a large degree of risk....and your value models make no allowance for the existence of this risk. The risk is real. Now instead of liquid CASH..they hold shares in an illiquid startup company with no proven business model. This cash is now at risk...and the fact is they could lose it. It should NOT be a foregone conclusion that each startup company is entitled to a succesful IPO. Startups DO fail...and contrary to the popular opionion that seems to pervade this market environment....MOST of them fail..and usually before the IPO. Can you acknowledge that IPO internet companies are at risk to decline in value before the insiders are able to sell? Have you tracked the performance of IPO's 6-12 months beyond their debut? ( I have...thus my skepticism...the MAJORITY are significantly lower than their debut)

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