Steve,
A very long but very good post. Some points I wanted to respond to.
>>The internet is in it's infancy, with five million users in 1995, 80 million today and expected to have 150 million by this time next year. I'm not sure if these figures are for the US or worldwide<<
You can be sure the 150M figure is worldwide. There are roughly 260M people in the US, so 150M would be too high for the US Internet population.
You also make a good point about how difficult it is to value internet companies. However, there is the danger that once they are actually making a profit as TSIG will supposedly, they will tend to be valued more along the lines of other companies that are profitable, although of course with a higher PE. So contrary to common sense, it may actually happen that internet stocks with profits may be valued more conservatively than those with no profits. However, I think EBAY is profitable and it does not appear to have this problem.
IMO, the future of TSIG depends on what sort of REVENUES it can generate over the next 6 months. It is not enough to have a money making PR. No one knows if the BR deal will actually generate 50M, 25M or 1M. People want to see the proof--in other words, it is a case of SHOW ME THE MONEY. TSIG has been making all the right moves, and the critical last step is now to generate significant revenues. I can only hope that TSIG has provided very generous incentives for the BR saleskids, since they will need some motivation to get out there and sell.
>>In fact REW has a visit planned to tsig in mid january. He has asked for us to submit to him questions to be asked to RG at that time. At that time if tsig is trading at it's pathetically low price and only a fraction of the babe ruth revenues have come in, I would like REW to ask RG about the possibility of a stock buyback. Where do you think that the price of tsig might be if in late jan. a pr is released citing a stock buyback and in mid feb we get the 4q98 10-q showing increased improvement?<<
By mid January, there will probably be almost no information available about BR revenues and I would be surprized to see the price over .75. But TSIG has no money for a stock buyback. Where would these funds come from under the circumstances you describe?
Also, I would be very surprized if 4th Q financials are anything to be excited about. I don't imagine anyone will be buying this stock based on the 4th Q. Now the first Q should be a different story, but it may be some time before we see those figures. |
