TAVA Technologies (TAVA-NASDAQ) Message Board

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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: fma who wrote (27416)	2/3/1999 6:05:00 PM
From: Karl Drobnic	Read Replies (1) of 31646

As a fiduciary for we, the shareholders, JJ has an obligation to use the money prudently. If the share price is low relative to the profit the company is making (divide estimated earnings by price: $1/7.50 = 13.3% after tax), then buying back the shares is the prudent use of the money. But as shares are bought back, eventually the share price rises, and alternatives to share buyback become equally prudent. So JJ could make the case that acquisitions were more prudent than share buyback since he could show more long term bang for the buck if acquisition by TAVA can add "synergy". And I'm assuming that TAVA's first use of the cash will be to pay back any high priced debt it possibly can in the very near future.

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