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Microcap & Penny Stocks : TSIS: WHAT IS GOING ON? -- Ignore unavailable to you. Want to Upgrade?

To: Loren S. who wrote (3216)	7/23/1998 5:17:00 PM
From: gregor	Respond to of 6931

Loren: As negative a thought as that is; i.e. reverse split do you think the ratio would be 1 for 10 or 1 for 20. That would put us up to either 5 or 10 per share. Assuming the stock price would drop back 40% or 50% that would put us back to either 2.50 to 6.00 dollars per share. If that happened I would triple my position and ride it out. I'm not sure that would be bad in the long run. The market cap would decline from 15 million to half of that, 7.5 million, or lets say one times 1999 sales. US Filter did a 1 for 100 reverse split and currently trades on the NYSE. From 10 years ago it has tripled in price adjusted for splits; so the return has been average. My feeling is that as obscure as we are in this little nook of the market they are better off not taking the mega dose of castor oil that a reverse split would mimic. The exposure would be great but the cost might be greater...... gregor

To: Loren S. who wrote (3216)	7/23/1998 7:35:00 PM
From: jmt	Read Replies (2) \| Respond to of 6931

Loren: A reverse splits is not in itself a bad thing. It gets a bad name because most companies who enter into reverse splits got there because the company fundamentals were poor, and the reverse just added the perception of more room to go down with the deteriorating business. If a company has good fundamentals, they will tend to trade with a market multiple (P/E, P/S, P/B etc) of its peer group. Given TSIS is in this camp, a reverse split would not hurt. The example provided of U.S. Filter is an excellent one. I would not be upset at a revrese split here. If the company can sustain 10 cent annualized earnings and a P/E of 15, the price would be $1.50. If there exists pressure for a Nasdaq listing, a reverse may be required. But if margins are high, growth is strong and earnings can be forecast at closer to 30 cents, they may make it on their own. Here's to wishing (with no evidence yet to support) the latter. jmt