Tech Squared (TSQD)- Internet Commerce Message Board

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Microcap & Penny Stocks : Tech Squared (TSQD)- Internet Commerce

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To: M. Frank Greiffenstein who wrote (293)	5/24/1998 10:54:00 AM
From: M. Frank Greiffenstein	Read Replies (4) of 2752

Conservative Valuation... I ran some figures on TSQD valuation based on a least significant scenario. That is, what if DR IPO is just good rather than hot. Here is what I cam up with. Shares outstanding = 10.4 million TSQD has 4.8 million shares of Digital River DR IPO is price at $12 a share, ends the first trading day at $12. The value of TSQD DR holdings would be 4.8 million X 12 = 57.60 million, or $5.54 per TSQD share. Let's assign a price-sales ratio of 1.0 to TSQD's core business. I figure with their new INternet catalog and a de-emphasis on Mac sales, this is reasonable. So that is 1 X 36 million comes out to $3.46 per share. TSQD owns large chunks of Hanover Gold and CAM Design, both traded on Nasdaq. The current value of those shares is about 0.75 per TSQD shares. Add in cash and you haved baout $1 a share. Putting it all together we get this: Digital River holdings after IPO (per share): $5.54 Applying PSR of 1.0 (per share): $3.46 Value of cash + othersecurities: $1.00 ______ $9.90 Now, factor in a 25% "haircut" and you get $7.43 per share. Why do I do that? Well the value of DR holdings is going to be disocunted by the market. If those DR holdings were to be sold into open market, it would cause sellling, lowering price of DR stock. Folks, $7.43 is the absolute lower limit of TSQD stock price come Fall of 1998. Based on current TSQD price of 2 3/4, I am expecting at least a 167% return from this point, even greater if I use my average buying price of $2. But a lot of good things can happen that will increase price: DR is hottest IPO of year...Internet catalog is a big success...CAM Design gets big contracts from automotive and aeorspace industries....DR does some kind of deal with MSFT (as mentioned by ROnning in TheStreet artcile in early April). DocStone

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