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

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To: Nick Smith who wrote (649)7/17/1998 9:19:00 PM
From: M.J. Mirghanbari   of 2752
 
The answer to your question is one part technical, and the other psychological (if you will). First, if DRIV's stock price press far past its IPO price, then TSQD, a major shareholder, will benefit in their next Quarterly report. Simple enough. The second part is that with DRIV's price driving upward, investors know that TSQD will at some time in the future capitalize on their DRIV stock, whether they sell, borrow against, etc. Investors, therefore, are willing to pay more for the stock knowing that TSQD's investments are profitable. TSQD's position in DRIV is not a far stretch from (let us use Ford for this example) Ford investing in modernization hoping to increase profit margins through capital investment. Grant the example is a little different than TSQD's situation, but I think the point is illustrated.

jalil
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