Denver Business Journal 4/16/98
Denver tech firms see stock prices move up - Deals responsible for increased value
Two Denver-based companies are seeing their stock prices surge as they extend their reach and reputations beyond the Rocky Mountain Region.
"Anytime stock runs up a buck a day for four or five days it's a surprise," said John Jenkins, chairman and CEO of Tava Technologies Inc. "It's definitely not something we're expecting or planned for."
Since early March, stock prices at both Rocky Mountain Internet Inc. and Tava Technologies Inc. have climbed seemingly without regard to corporate earnings reports, but on the heels of key deals expanding the national presence of both companies.......
Tava Technologies, an Englewood-based core systems integrator, may also have been underestimated by the market.
"I think it's important to note that when the stock was at $1.37 in 1997, there was value there that wasn't recognized," said Ken Trbovich, an analyst at Red Chip Review a Portland, Ore.-based small-cap research publication. "This run has been accentuated because the stock had been sold so low down."
Shares of Tava were selling for $8.78 on March 11, rising to $14 on March 25, and finally $12 on April 8. This run follows a steady rise from it's 52-week low of $1.87 this time last year. The company delivers Year 2000 problem solutions for the manufacturing sector. Specifically, Tava addresses embedded systems that are found in the computers running factory floors.
"The thing moving Tava really is the awareness of Y2K issues," said Russell Welty, a research analyst at Denver-investment banking firm Hanifen Imhoff Inc. "I don't think anyone realized the potential of the market until recently."
Some high-profile clients in the news are also helping catapult Tava shares. Trbovich emphasizes the impact of a recent Y2K contract for some Coca-Cola Co. factory systems on the stock price. In addition, a mid-March article in the Wall Street Journal, where General Motors discussed the impact of Y2K on its embedded systems. The automobile-giant, and a Tava client, is one of the first major manufacturers to publicly address embedded systems in its business.
"GM said this is a big deal, but we're in control of it but we're going to spend a lot of money to fix it," said Jenkins, who points to the GM story as the driving force behind the recent run. "It's external corroboration to the sermon we've been preaching for nine months."
Tava won't release it's latest earnings for several weeks, Jenkins added, emphasizing the rise in stock price isn't a response to quarterly financials.
"It's not a reaction to earnings or press release activity," said Jenkins. "I think its the awareness of Y2K issues is very rapidly increasing and our space in that position is pretty well known." |
