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Technology Stocks : Thrustmaster (NASDAQ:TMSR) -- Ignore unavailable to you. Want to Upgrade?

To: Pete Mason who wrote (2342)	8/8/1999 6:05:00 PM
From: Timothy Detjens	Respond to of 2443

>Wonder what's up with the big moves?? Guesses: Judging from the nets across the board, I would bet that your #2 is the clue. So TMSR lost a bunch of holders that probably won't be back. Will their continual stealth marketing campaign bring in the revenue to bring them back? MPTH has $10 million in sales, and it appears that their market cap may start approaching TMSR's. Be interesting to see if MPTH continues it's inability to rally.

To: Pete Mason who wrote (2342)	8/30/1999 3:53:00 PM
From: Pete Mason	Respond to of 2443

Numbers... The new Internet business sold $346K in Q1, and $375K in Q2 (that's 8% Q-to-Q growth rate). Project that for 4 quarters, and you get approx $1,566K. Which, incidentally, with the current market cap of $85M gives a price to sales ratio of 54! Hey, maybe it actually is an Internet commpany! So their Q2 loss was $351,000 and Q1 loss was $202,000 (this number wasn't volunteered in the press release, you have to perform subtraction to get it). They sold 8% more product, and lost 72% more dollars! But it's not too clear what to make of these numbers... for example, they claim total Q2 operating expenses of $584K, and complain that those GAAP-required figures are too high, but I have a hard time believing that they're that low. I have a very hard time believing the next quarter will be anything like that, unless they are going to do essentially zero promotion and/or advertising. But wait, if they go entirely into OEM land and don't even try to sell products off the shelves any more, I suppose they then would do essentially no promotion. And I would expect their sales to reflect that lack of effort... except they'll get drastically fewer dollars per product now, so it may even get worse! Q2 expenses claim $92,000 total Research & Engineering costs?? What is that, like three engineers salaries?? Either that number is phony, or this is a "technology, Internet company" who's entire R&D commitment is three guys in front of computers... $85M market cap based on the engineering of three guys??? Hope they're pretty good... Or is the business model "We buy stuff from Intel, use our amazing marketing prowess to sell it, and so we don't have to do any expensive R&D ourselves"? That doesn't sound like the kind of business plan that supports a 54 price-to-sales multiple!! Not to say you couldn't make a business rewrapping INTC technology, but with the current & expected losses and sales levels and sales growth rates, I'd expect to see a price-to-sales multiple of approx 1, which would give a stock price of $0.31 per share... at which point I'd probably cover my short. -- Pete