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Microcap & Penny Stocks : Toups Technology Licensing, Inc (TOUP)

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To: GlenRP who wrote (215)5/27/1999 11:49:00 AM
From: Dan O.  Read Replies (1) of 317
 
1) Why buy at market? Because that is the only way I can. If I were ready to put up $2m for I private placement I might. But I'm not.

2) Why pay $2.00. I wouldn't. The stock is selling in the 1 7/16th area.

3) The company gives them away for .25 to .50. If you bothered to talk to the company you would find out that the placements were for 1/2 the average selling price of the stock. Most have gone for over $1.00.

4) No concern for current investors. The 3 top executives control over 1/3 of all outstanding share. They are the current shareholders. Each receives salaries in the low 60's, well below industry average and they receive no special perks like cars or even reserved parking spaces. They are obviously in this for the long term stock appreciation.

5. You believe they will issue 100m shares? They need to raise $50,000,000? Extrapolate their last qtr loss and that would cover their burn for the next decade. If in some scenario they decide they need the money to grow the business, we as investors have to look at it and decide if they are making a good decision. So far I think they have.

To directly answer your question I'm not sure that the average investor should buy stock in this company. I bought because I think that within a few years they will be rewarded with a strong positive cash flow from sales and license fees. They will probably always be buying new technologies, spending heavily on R & D, building new facilities, and have large marketing expenses. That's the way it works. With good management they will cast off what is low margin and concentrate on what they think will pay off in the end. I think that they are moving in the right direction. If you can't see or understand why they are doing the things that they are doing, or you don't agree with managements growth management stratagies, you should not be in this stock.

Dan
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