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Non-Tech : E4L, Inc. (NYSE: ETV)
ETV 14.22+1.0%Nov 25 4:00 PM EST

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To: Todd D. Wiener who wrote (37)2/26/1997 10:09:00 AM
From: Chris Reynolds   of 1080
 
Hmm...Interesting idea. For SFE to buy rather an established company, rather than its main business of hatching and launching fledglings, seems like a stretch to me. As an SFE shareholder, I'd oppose that strategy, unless SFE could add some special value in making over the target company, then relaunch it.
But on the other hand, SFE does already own a chunk; Pete Musser has joined the NM board; the companies have a history together; and like regular folks, SFE may be subject to the temptation of a bargain.
Appreciate your valuation models. I agree NM is way undervalued on a price/sales basis. My take on why the stock is trading so low is that the perception is that Guthy-Renker is cleaning NM's clock ("The amazing wonder clock!! Never replace batteries again!! $ 29.95 plus $ 6.95 postage and handling!!"), and that NM will soon be a #2 player. The stock market likes clear market leaders these days. I think one could also argue that -- at least domestically -- the future growth of infomercials as a sales device is uncertain. But that's a discussion for another day...
Anyway, I've thought about NM options too. What prices/strike dates do you like?
Best,
Chris
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