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Technology Stocks : SOFTKEY=MERGER MANIA

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To: Machaon who wrote (874)	3/12/1997 9:49:00 PM
From: Thomas C. Donald	of 966

Maybe a stock buyback is not necessary. Your ideas are good, Bob. However, something quick and strong needs to be done to get TLC's share price up. The share price should be much higher than it is, given current earnings estimates. Management has not challenged these estimates. If it dosen't feel that the estimates are reasonable, it is obligated to say so. Maybe investors believe that the issue is being avoided. If that is the case, management needs to strongly state that it feels that the estimates are reasonable (instead of not stating that they are unreasonable). If investors believe that management is not hiding anything and knows what it is doing, the share price will rise without a stock buyback. The challange is to promote the necessary trust. A token stock buyback might help in the sense that management would be putting its money where its mouth is. Perhaps Perik could say that TLC is buying some shares at today's bargain basement prices for an employee stock option plan which will lead to even greater company performance. Bob is right that there are better uses of TLC's capital than buying back stock. This is true even if sales are strong. However, a stock buyback has some strong psychological benefits.

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