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Microcap & Penny Stocks : TESCORP (TESC) = Undervalued Opportunity!
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To: MKEL who wrote (66)7/16/1997 9:11:00 AM
From: timmy e.   of 206
 
Mkel, I know as a fact that the Company is arranging financing at this time but I am not privy to the amount or the structure (i.e., debt/equity, all debt, all equity). My best guess would be a combination of the two. They have practically no debt on their balance sheet ($6 million; unheard of in a cable television company), yet an equity infusion (if not dilutive) would be nice to improve liquidity. I agree with you about the "strange" trading activity of late and I plan on buying more if I can get it at about $3 1/8. In explaining my previous message, my past experience tells me that a brokerage house that will be supplying the additional equity (if this is indeed the case) will buy up the available stock for sale until it reaches the price that the two companies have agreed upon. How would it look if Tescorp raised, say $30 million in equity at $3.50 a share, while the shares are trading at only $3.00? This would convey to investors that Tescorp got a great deal and the brokerage house (Prudential, Smith Barney?) didn't know how to value the shares. On the other hand, shareholders don't want to see Tescorp management agreeing on a financing deal valuing TESC shares at $3.00 when the shares are presently trading at $3.50. This type of "manipulation" makes both parties look good. Any comments?
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