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

To: voyager.ed who wrote (1462)	5/11/1998 1:52:00 PM
From: Noblesse Oblige	Read Replies (1) \| Respond to of 3247

Hi voyager, Raefon.... You have both pointed out the ludicrous comparison between the TFS market capitalization and a couple of other, lesser light, companies. I agree with each of you, TFS is grossly undervalued in comparison. I don't seek to beat a dead horse, but this situation, unfortunate as it is, comes directly from the lack of attention that TFS has paid the "Street" over the last several years. It appears to me that this may be in the incipient stage of changing, as recent broadcast interviews, a presence at the Red Chip Conference, and other activity suggests that management (and Vince Hren, to his credit, though he is still inexperienced in this regard) are trying to raise the company's visibility on Wall Street. What appears to me, however, is that this heightened interaction may well be coming only because it is likely that TFS will have to raise additional capital in the next 6-12 months, as rapid expansion and inventory buildup (both of which are profoundly necessary to get the company to the next level) will require some cash above and beyond present balances. This is all to the good, but the unfortunate part is that it will appear to Wall Street as though TFS is only interested in raising investor awareness during those periods where it needs to raise money. I am not certain...and everyone understands why, so there is no need to belabor the point...that the recent attitude regarding TFS's equity value (and how to deal with its persistent relative undervaluation) is a permanent change. I certainly hope so, but it saddens me to think that the recent improvement in efforts to communicate the TFS story has come so late in the bull market. If it is too late to help us (and my guess is that is up to Mr. Greenspan and other events far beyond TFS's control), not only will all the shareholders have been hurt by having lost the opportunity to have their shares valued fully in a bull market, but the ongoing efforts of the company will be hurt as well. Why? Because any new equity (or equity equivalents) that the company chooses to sell for financing purposes will clearly prove more dilutive than what was necessary in the current market environment. For shareholders, the price of management's inattention to valuation matters is a cost that we will have to live with for some time. Aside from the day-to-day matters related to making a company "work," there is nothing more important to the owners of a business than seeing it priced at an optimal valuation. And, on that score, it is clear that the two companies you collectively mentioned have done a far superior job. Have a good day.