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

To: M.J. Mirghanbari who wrote (696)	7/18/1998 1:00:00 PM
From: Ignatz	Read Replies (1) \| Respond to of 2752

Here is the Digital River section of Tech Squared's 3/31/98 10Q filed 5/15/98: NOTE 3 - DIGITAL RIVER In December 1995 the Company obtained a bargain purchase option to acquire 4,800,000 shares of Digital River common stock from the Company's majority stockholder and chief executive officer, representing at the time a 60% ownership of Digital River. The option is exerciseable at any time through December 31, 2000 for a total exercise price of $1.00. Digital River has developed and is operating a proprietary system which allows the secure sale and delivery of software, fonts and images on-line, via the Internet. Digital River's first on-line software sale and delivery occurred in August, 1996. During the three month period ended March 31,1998, Digital River completed various private placements of its common stock which resulted in net proceeds of approximately $9,201,000 and issuance of 4,840,000 new shares of its common stock, thereby reducing the Company's effective ownership of Digital River to approximately 23% as of May 1998. For the three month period ended March 31, 1998 the Company recorded gain on issuance of stock by Digital River of approximately $1,461,000, net of deferred income taxes of $865,400, which was recorded through the Company's stockholder's equity. Now the question is what affect does this have on TSQD's stock price? FWIW here's what I think. TSQD has about 10,500,000 shares o/s. Let's say DRIV prices out at $50/share after the first day of the IPO (around 8/14/98 I guess). 4,800,000 * $50 = $240,000,000. $240,000,000 / 11,500,000 TSQD total share o/s = about $20.87 per TSQD share. Is my thinking flawed? Please rip my thinking to shreds. Why won't TSQD go to at least $14 - $15 just based upon this option on 4,800,000 shares of DRIV? Of course DRIV may only reach $30 or $40, but what the heck BCST is at $60+. Isn't this fun?