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

To: UntamedSquid who wrote (14003)	4/3/1998 10:40:00 AM
From: Mr Logic	Read Replies (2) \| Respond to of 31646

Squid, >>The story is definitely worth more than $250M in market cap.<< I agree if your forecasts come true. But they are only speculation... it would be valid to speculate numbers 1% of that size. The other brick wall is the remediation - 5000 sites @ $150k per site even at $1,500/day rates is 500,000 man days - equivalent to TAVA having 1,200 dedicated y2k staff working flat out from Monday until 31/12/99, and getting the contracts in to support that workload. They currently have around 300, plan for 350 by mid year, and most of those are in the core business, not Y2K. Further, John Jenkins said in the conference call "...our intent here is not to load our staff by 6 or 700 and then have to shed dramatically even in year 2001." This seems to confirm (a) that they see 6-700 as a very high number that they will not approach and (b) that they don't see the y2k remediation business extending far beyond 2000. Staying within these parameters, you can put together a more accurate picture of potential revenues on the remediation side. Say an average of 200 dedicated people over the next 24 months (take total TAVA technical staff to about 5-600), at $1,200/day, 80% billed, at 35% margin is about $34m in earnings, or a one-time value of $1.70 a share. That is assuming that they actually get the remediation business. Do you see why I say it is difficult to justify a $250m market cap? Rerun your calculation - keep the 7,500 $20000 CDs etc. if you like - and you end up with $100m, meaning that the ongoing business needs to be worth $150m just to justify today's price. Last July that business was worth about $40m.