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

To: Noblesse Oblige who wrote (2281)	8/21/1998 7:32:00 PM
From: dfloydr	Read Replies (1) \| Respond to of 3247

Hi N.O.: Two of your posts : <<the stock wouldn't have reacted this poorly to the current news>> etc... & <<One can only wonder whether, if management had been looking ahead, what the impact would have been if it had simultaneously announced the buyback reinstatement along with its earlier press release?>> I think TFS could be an interesting case study for somebody's MBA ... a degree I would not grant any of them on their performance in this area over the past year. Over the last six months any reader of the WSJ or IBD has had plenty of chances to see how bad news hits a stock in this market and how the market has reacted to different presentations of that news. Cendent, a plain case of fraud from my experience with their service, took appropriate gas. Others have been able to combine short term bad news with some concrete future positives thereby putting their problems in perspective and have not done too badly. Here is TFS almost down to book value on what may only be a short term disappointment. Except for the last two conference calls, they have shown zero understanding of investors' concerns for as long as I have had the unfortunate ownership of their shares. Ironically, for a change, this bad news was reported almost perfectly in the Phoenix papers yesterday while all the previous positive announcements have been garbled beyond use. (Did you see one news service did mess up ... they reported that TFS stock was down because the company reported earnings would be up to 10 cents higher than expected). As you suggest, their style of investor relations is enough to scare the pants of any sane analyst. What analyst needs the grief that this company has dished out. Brokerages have enough sense to try!!! to keep their clients away from managements that do not communicate. This announcement could have been accompanied by a reminder that in the last conference call they had talked about weaker margins (they actually did).... which are proving worse than then expected ... maybe something about which competitors are providing the hurt ... about how their new products should show higher margins, hence the push in that direction and the move to acquire Siliscape, etc.... something about opening up the opportunity to start doing business with other cell phone makers ... and as you have suggested, an announcement about plans to reinstate their share buy back program if the stock price were to slide much further. This might have left the impression that management knows what is going on and that while seas are a bit rough at the moment they have plans to get out of the storm. Assuming all of these positive items are true, as we who are close to the action have been told, I doubt TFS would have dropped more than a point or two from the already low level it has haunted for the past few months. As it is, the announcement came across like a shout of Fire in a crowded theater. Few probably stopped to consider book value, the implications of a factory in China, etc ... blunt and lousy news, a history of lousy communications, .... and the investors fled. You are so right, TFS just does not understand that investors like and deserve to know a little about what is going on in their company. If investors feel they are getting the whole truth, they can be remarkable patient. If not, they have no reason to hang around. Same in politics: what is gradually breaking Clinton is not the sex, its the fact that he did not level with his crew (investors). Floyd