Here is a reprint of the small cap investor update,
Tech Electro Industries (TELE) January 1998
Current price: $2.75 bid
smallcapinvestor.com
TECH ELECTRO TO PURCHASE INTERNET COMMERCE COMPANY
On Thursday TELE announced that it entered into a letter of intent to
acquire 100% of Bostek, Inc., a leading reseller of computers and
computer components with corporate headquarters in Massachusetts.
Through its Internet brand, American Discount Warehouse (ADW), Bostek
sells computer products online at ADW's web site
pickadw.com , and has reported Internet sales exceeding
$2,500,000 in the past three months. Bostek's total sales, including
sales to name brand outlets, totaled $5,000,000 per month during the
past year.
Steven Scott, Executive Vice President of Tech Electro said, "The
Bostek acquisition commits us to E-commerce, and gives us an excellent
distribution channel on the Internet. We attribute Bostek's success to
its excellent management team. Tech Electro hopes to keep this team as
the basis for growth in this sector."
David Romano, President of Bostek, Inc. added, "We are very excited
about this transaction. It will help us expand our business and offer
improved opportunities to our customers, vendors and employees. We will
be in a much stronger position to compete on the Internet."
The transaction is subject to fulfillment of a number of conditions,
including definitive documentation and financing. It is designed to be
non-dilutive to TELE shareholders. TELE currently has 4,133,000 shares
outstanding.
Press release: biz.yahoo.com
And earlier in the week US Computer Group (USCG), a subsidiary of TELE,
unveiled its Learning Center, a revolutionary new Internet/Intranet
based training tool which gives users access to over 200 courses on the
most popular software applications from leading developers such as
Microsoft, IBM, Lotus, Adobe and Symantec.
On-line training has significant benefits over traditional classroom
based training and the technology behind the Learning Center will
revolutionize the way in which training is delivered. It allows people
to learn at their own pace, any time, any place, by simply logging on
to the courses they have selected via the Internet.
The company anticipates significant opportunities to market the
Learning Center to banks, educational institutions, hospitals,
governments and Fortune 1000 companies.
President Stephen Davies said, "We are extremely excited to be able to
leverage both the Internet and our extensive customer base to provide a
really powerful training solution. We are on the ground floor of an
exciting new Internet application and have dedicated a number of sales
people to this product. We believe that this will become a very
important part of our business."
Press release: biz.yahoo.com
TELE shares jumped from below $2 to as high as $4.25 after this news
was released. (TELE was at $1 just a couple of weeks ago.) But after
the big news of the Bostek acquisition was announced on Thursday, TELE
shares began to fall. Why? It looks like a "buy on the rumor, sell on
the news" situation. Many people bought TELE shares last week looking
for a quick trade. Also, TELE investors who bought at around $3 many
months ago and then watched the shares sink to $1 may have used the
opportunity to get out of TELE at breakeven or with a profit. So where
does the price go from here? It's impossible to say, but with TELE
shares nearly triple their price of two weeks ago, there may be some
additional profit taking. On the other hand, if Internet Mania
continues and more investors learn what's happening at TELE, it's not
hard to imagine TELE shares trading significantly higher. Afterall,
TELE just announced that they are acquiring a company that does
business on the Internet, has approximately $1 million per month (and
growing) in Internet sales, and has a history of being profitable. And
they have a very nice and professional looking web site at
pickadw.com . If this acquisition closes, TELE will own two
computer companies which both do business on the Internet and will have
total revenues of approximately $100 million. |
