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Technology Stocks : THREE FIVE SYSTEM (TFS) - up from here? -- Ignore unavailable to you. Want to Upgrade?

To: dfloydr who wrote (902)	2/2/1998 7:16:00 PM
From: Doug Meetmer	Respond to of 3247

Would it not make more sense to raise capital by doing a secondary stock offering when the price of TFS is higher? The problem is that the stock price is too cheap, so any secondary offering at this price would be dilutional. I do agree that the company is in great financial shape and could raise money in other ways, such as through a bond offering.

To: dfloydr who wrote (902)	2/2/1998 7:42:00 PM
From: Noblesse Oblige	Respond to of 3247

HI D. Floyd Russel, You have asked whether management has commented on my "suggestion" that TFS raise capital now because it is relatively inexpensive, and because the company NEEDS some additional research coverage. Frankly, Floyd, I don't know. Certainly they haven't done so with me. Historically, I haven't had the best relationship with this company. It comes from my being honest in my communication. Nevertheless, the senior people have done a better job telling the tale in the last few months, though it is painfully clear that there are precious few investors interested in listening. That would be the purpose of doing a modest offering. Assuming the book was split between two main underwriters, there would at least be an additional two research analysts providing coverage. The bottom line in this world, Floyd, as you well know, is that you get what you pay for. TFS hasn't "paid" for research coverage in years, and aside from Furman Selz' Bob Cihra (who is quite knowledgeable, a decent analyst in my view, but totally without a following!), there is no discernable "Street" interest. The way I look at it, Floyd, as a long-term "activist" shareholder, it is my responsibility to myself and those that entrust me to invest their capital to bring appropriate and workable solutions to managements on problems that I believe are getting minimal attention. I have done it with Simula (resulting in a couple of additional hires to attend to portions of that business) and I will continue to do so here. Whether they believe I have anything "useful" to add can be judged by what actions they take to enhance shareholder values. At the moment, I would settle for an "average" P/E ratio based on this year's likely per share earnings. Certainly, achieving that would make management less vulnerable to unsolicited suggestions from shareholders concerned about the valuation of the business franchise. Have a good evening.