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Microcap & Penny Stocks : Tech Squared (TSQD)- Internet Commerce -- Ignore unavailable to you. Want to Upgrade?

To: 24601 who wrote (615)	7/17/1998 12:11:00 PM
From: M. Frank Greiffenstein	Read Replies (3) \| Respond to of 2752

No, we should discount... 24601, I would not feel comfortable doing that. My valuation model includes a disocunt of the market value of DRIV shares. 4.8 million shares in the hand is not worth 4.8 million shares in the bush <g>. In other words, the market will discount the value of TSQD's ownership of DRIV. I have applied a discount of 25%. Even if that discount were 50%, TSQD is still selling cheap. This assumes of course that DRIV is hot and performs like INKT and others. Here's the math: DRIV goes to 40 shortly after IPO. TSQD will then hold 192 million of DRIV stock. Apply a disocunt of 25% and it is valued at 144 million, or $14.40 per TSQD share. Apply a discount of 50%, and you get a valuation of $9.60 per share. Even under this very conservative model, TSQD is not even halfway there yet. And it doesn't include a turnaround in the core business. TSQD has a new CEO and CFO now, so Ronning can pay full attention to DRIV. I think part of TSQD's problem has been that ROnning was distracted by DRIV. I expect TSQD to show increasing revenues by the end of 1998. But there is still a negative we need to monitor: APPL taking back cloning licenses. Not sure how this will effect TSQD bottom line, it is already old news. But sometimes these things have a delayed effect. DocStone