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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Skeptic who wrote (12124)	3/3/1998 10:18:00 AM
From: eric deaver	Read Replies (2) \| Respond to of 31646

Skeptic- I think I understand your perspective but it is a fact that the relationships being built under Y2K have a value. Under your formula (if I am understanding it now) the value of these relationships is $0 and that's is simply not fair. Also, cash on hand (i.e., when Y2K is complete) adds stability to a company (and according to you should increase the P/E). Look at APM neagtive earnings, no future market, beat out by competition on all fronts yet still a P/E/ of 3+. Tava can surely do much, much better. The biggest thing, however, is that TAVA stock price should be priced to include the value of the relationships being developed. IMHO. Eric

To: Skeptic who wrote (12124)	3/3/1998 11:12:00 AM
From: Norman Stone	Respond to of 31646

Good point, Skeptic. It looks like analysts are giving TAVA close to a 100% markup on their core business, based on new Y2K driven alliances, and some will call this conservative, while others call it optimistic. Since this is a highly speculative estimate, it is probably "hedged", as in "There is a 10% chance of fourfold increase, etc." You can believe in blue-sky estimates that reach to infinity (as some on this thread probably do), but these guys have to try to quantify risk, too.

To: Skeptic who wrote (12124)	3/3/1998 12:58:00 PM
From: Dr. J	Respond to of 31646

I agree with your analysis. Moreover, in a break-even product-based business the PM (and cash flow) grows astronomically proportionally once you get above break-even point. Sell 10% more product and you might earn 20, 30, 40% more money (depending on the base), because your variable costs are low relative to fixed costs. In that environment it really might be reasonable to say that Y2K will add $2-$3 in cash flow to base business. My problem is that TAVA/Topro isn't a product business after 2000. They're back to consulting. Consulting is strictly proportional to hours; if you price the consulting right you should be making money. Variable costs are high relative to fixed costs. Add more 10% more consultants and you should earn 10% more money. They haven't shown they can make money today. Why should they be capable of making it in 2001? Most consulting companies I have seen get valued at 10x PE or lower.

To: Skeptic who wrote (12124)	3/3/1998 2:03:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 31646

Skeptic, If TAVA continues to do the amount of business that it currently engages in, I would grant credence to your scenario. However, I fully expect TAVA to utilize strength in its publicly traded stock to acquire additional IIT consulting firms in its bid to consolidate the industry. Since many of these are private concerns with strong businesses of their own, converting their assets and market share into TAVA utilizing accretive acquistion strategies should enlarge the company's revenue stream as we move along through 2000. Again, Y2K will be the driver that creates consolidation in this splintered consulting sector. TAVA's partnerships with leading Fortune 100 companies should ensure future business growth as TAVA accumulates the resources to handle larger projects. And the gain for these private firms is clear as well. They are able to turn their years of hard work into a publicly traded equity foregoing any hassles with seeking capital in the public markets to compete with a growing TAVA. Regards, Ron