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Microcap & Penny Stocks : DCIC/FTEL/FNET
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To: Vincent Scott Clements who wrote (152)8/4/1996 12:07:00 PM
From: LT   of 405
 
Hi Vince,
Those are good questions and concerns and are well asked. I certainly didn't take them as bashing. These small stocks are all high risk and the best you can do as an investor is manage that risk. Many small stock investors put all their assets into one stock trying to hit a homerun and that is usually a fatality. As to your questions.
RB's numbers are based on an IPO price of $14.00 of which DCIC has said they are planning to do a 3 for 1 issuance so there is where the $42 comes from. He didn't say the stock price of DCIC would be $42 but that the value of owning DCIC was $42. Does that make sense?<G>
The bridge financing was obtained from the best source available to them. Venture capital isn't something you are going to get down and 1st Federal Savings and Loan. The banking industry has collateralization repayment requirements that only companies with large asset bases can take advantage of. A saying I always likes goes like this...."If you owe the bank 10 million, the bank controls your business but when you owe the bank 100 million, you control the banks business." Venture capitalists are willing to take the high risk/high reward road by providing you with immediate cash in return for a piece of the action.
As to WORK, it looks like many of the story stocks as you describe it. Anyone that has ever invested in small caps has gotten burned by that type company at some time or another...even those that do tons of homework. The key is to not overbuy, manage your losses if they occur and head for the hills when you see signs of problems that are fundamental to the story.....TVIN is my example<GGGGGG>. Take care...

MH
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