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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today -- Ignore unavailable to you. Want to Upgrade?

To: LT who wrote (5992)	5/25/1998 10:16:00 AM
From: James Harold Alton	Read Replies (1) \| Respond to of 19331

Hi Lou, It's been educational making some of these comparisons of DCI to some other companies. One thing that I find interesting is that there appear to be very few startup companies in DCI's sector that have had profitable quarters (which DCI has in the recent past), in fact most appear to be running deeply in the red. This often requires taking on debt or floating shares to keep the doors open. Growth via M/A appears to me to require some careful balance to be successful and I believe this is where we have an advantage over some other companies. Taking on too much debt early on in a companies life appears to be one of the riskiest tactic to me, since if the earnings don't come in as expected, how do you service that debt? On the other hand, issuing too much stock early in the companies life when the stock value is low can result in excessive dilution and loss of shareholder value. Careful use of company shares and also debt appear to be critical in the startup phase of a M/A company. It also appears to me that there is almost a "critical mass" that some M/A companies reach in that they grow fairly slowly at first, but at some point become large enough to have the financial leverage to acquire ever larger/stronger companies and at this point the growth rate accelerates. This appears to me to be what has been happening with DCI since we brought Edge aboard, if this is the case, I hope it continues. (G) Do you have any thoughts on this? James