To: CalculatedRisk who wrote (21321 ) 7/29/1998 4:05:00 PM From: Bonzo Read Replies (4) | Respond to
The key to TAVA's future valuation is how that $100M or $200M in Y2K cash is invested. Jenkins is on record as stating he will grow the core business both internally and through acquisition as well as enter new business (applications and markets) that offer higher growth potential (Bullotta touched on this in previous posts). I have always felt that TAVA is, and remains, a Speculative Buy. The key is not the Y2K cash generated but the increased growth and opportunities that this cash will provide over the next 2 years. If I thought otherwise I would not have invested in the stock (last Oct). TAVA's business model is not static the cash will be invested for corporate growth and not simply sit in a savings account collecting 5% interest. Your valuation model does not take this into account. My investment thesis is based on the expansion of their core business and subsequent entry into higher margin and higher growth opportunities per Jenkins business model. After having conversed with Jenkins personally for approx. 1 hour, I'm going with Jenkins on fulfilling his strategy, you my "short friend", although seemingly much more knowledgeable than Wexler and his ilk, will be proven wrong in the long run - imo of course. An investment in TAVA isn't a sprint to the finish line (you have won the sprint - congrats on your profits), but will grow at a more moderate pace to the Year 2000. Lets measure TAVA's progress on that basis instead of looking at the past checkered performance of TPRO (pre-Jenkins), supposed shady loan agreements (for which the company has answered to my satisfaction) as well, other more knowledgeable CPA's have found nothing unusual about the terms of that loan. Q4, 98 earnings will be released in September and Q1, '99 probably 30-45 days later. Lets reconvene our discussion of TAVA's future valuation at that time. The TAVA investors who are the most knowledgeable on this thread; the Drobnics, CK, Mansfield, Bullotta and others, have not been shaken out by the shorts or margin calls. Why do you suppose that is? Could it be that they have performed the most research of TAVA, its niche and the industry? TAVA's shareholder base is one of the weakest that I have ever been involved in. Those who have done serious research on TAVA, the agreements being signed, attended shareholders meetings, previewed the software, spoken to management are confident that TAVA will succeed in time. Those who do not will continue to fall prey to the Wexlers and the Pinks.
