Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : TEAL -- Ignore unavailable to you. Want to Upgrade?

To: dick rhodes who wrote (93)	12/22/1997 9:47:00 PM
From: Tom Hua	Respond to of 160

Dick, Let me try to give you my take on your questions. 1. Why so depressed? Well, the company did screw up big time last quarter. Although the company has historically relied on few large customers, not being able to close any deal is not forgiven by WS. As you have witnessed, I'm sure, software companies'stocks can easily be halved overnight on one poor quarter(On the contrary, they also ran up fast on good performance) and TEAL is no exception. Tax loss selling has put on more pressure. While I personally viewed the Dec 5 announcement positively(except for the unnecessary reiteration of Q3 loss), WS is unsure, hence another round of selling. TEAL is so depressed now that I do believe we have seen the bottom. It will stay there for a little while until company can show sign of a turnaround, or positive contract announcements. 2. When it might turn around? This is the $64,000 question. I wouldn't dare to say. The question I ask myself is can this Q or next Q be worse than last Q? Hardly, I think. IMHO, Turnaround in the stock will start after earnings are announced in January. 3. Take loss or hangon? Only you can answer this question. If you think TEAL won't rebound in 30 days from your sale date, taking the tax loss makes sense. That's a big IF, though. The company has plenty of cash to weather the transition period. Having just signed a master reseller agreement with Tracor, a $1 Bil goverment contractor, TEAL's product exposure will increase substantially. The problem with TEAL was its ineffectiveness in its direct sales force, so this new indirect distribution model is likely the right thing. As you know, as of 9/30, TEAL has $3.1/share in cash, and a book value of $3.7. IMO, the stock has a much higher chance of going up than down. Regards, Tom