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

To: dfloydr who wrote (1529)	5/29/1998 1:19:00 PM
From: raefon	Read Replies (1) \| Respond to of 3247

To the thread, and Floyd, I share your disappointment. I have urged caution for some time now, sometimes I wish I ate more of my "own cooking"... I just spoke to Jeff. Company had $13mm in cash at quarters end. Company has an unrestricted credit facility of $15mm. Company anticipates a credit facility in China(likely through a Hong Kong bank) Company does not need $ and the primary focus of a financing would be to increase visibility. The company is not interested at current prices, my seat of the pants is the stock would have to be mid-$20's. Bottom line, the company has ZERO intention of diluting shareholders at current levels. With respect to an "unfriendly" bid, the board is not staggered, there is no poison pill, only what Jeff considers a "core" shareholder group friendly to the company. If we saw one bid, IMO we would see more...I still feel KOPN would be nuts not to look at this business. With respect to business ex MOT, things are "going according to plan". With respect to the backlog, could not address that today, will on the call. With respect to risk to future MOT business, he feels MOT is pretty far behind and will have to play catchup..still having some technical problems with their Digital systems. Jeff suggests, and rightly so, it is different this time. There has been no cancellation, only further pushouts because MOT continues to have problems. I inquired what prompted the specific timing of the release. He indicated that their was a conversation YESTERDAY with MOT that made it clear the volume would not be there in the current quarter, hence this mornings announcement. With respect to China, I asked if the capacity was an issue of "if you build it they will come" mentality. Jeff responded by indicating they would likely be capacity constrained at year end. He suggested that if they waited for the demand, they would have to turn away business. Also suggested that Ericcson had a plant in close proximity. While we have not seen any announcements to indicate any type of business alliance, it is clear they are hoping for one, IMO of course. I asked about the KOPN/Ericcson demo I referred to in a previous post. He was aware of it but down played the significance. I inquired about the risk to H.P. business. He implied that while the ASP's are coming down as anticipated, TFS was expanding their relationship. While I am clearly disappointed and will have to reflect upon what to do, he handled the call extremely well. The guy is doing an excellent job with the cards he has been dealt. Hope this helps. Regards to all, at least I get to watch MJ beat up on those Pacers tonight.

To: dfloydr who wrote (1529)	5/29/1998 2:50:00 PM
From: John Morelli	Respond to of 3247

I would think that if they need financing debt would be the way to go (they certainly aren't highly leveraged at present) therefore no dilution.

To: dfloydr who wrote (1529)	5/29/1998 5:34:00 PM
From: k.p. chen	Read Replies (1) \| Respond to of 3247

Hi! I agree with you completely,having been in TFS for so long(completely out after their 1Q earnings report). Remember the price action before those big drops in the old "good" days? Price and volume tells you what's going on at the company. IN my opinion, the company has not diversified its customers enough. The dependence on MOT is a big problem, as we all know the big mess at MOT. TFS's venture into China is to accomondate MOT's business there, and it carries huge risk that the company may have not realized. I will personally check TFS's site there this summer when I travel over there. MOT is a big loser, misstepeed so many times, and now don't know what to do with their business.