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Technology Stocks : Safeguard Scientifics SFE -- Ignore unavailable to you. Want to Upgrade?

To: michael r potter who wrote (1624)	8/27/1998 7:05:00 PM
From: John Arnopp	Respond to of 4467

Thanks, Mike. I think you mean early 1997, not 1996. But there is another factor, perhaps a big one. Back in 1996, Safeguard had a track record of 1 offering per year in each of 1993, 1994, and 1995. In 1996 they completed 2 offerings. They announced the 3/year strategy in 1997, but only completed one (DTPI) before the big slide. I don't think people buy Safeguard for the public portfolio, as a sort of mutual fund, but perhaps I am wrong. (I am amazed at how closely SFE usually tracks the public portfolio - who is monitoring this and doing all the selling/buying?, considering that SFE tends to have a higher percentage of individual owners, not institutions.) I think people look to Safeguard as a way of getting in on IPOs. Therefore, the very bottom (for Safeguard, anyway) will happen when the management shows they can deliver quality IPOs (not every stock can be CATP or CCSC, but SCAI and DTPI will do as examples) and can stick to their announced strategies (i.e., 3 per year, or whatever, as long as they honor the commitment). There should be a premium to NAV, and it should be based on the performance of the IPOs. Therefore, there should be little or no premium now, but if every stock could stay in the $10 range, or greater, that could justify a $10 premium, IMO. But, to the extent that people see other ways to get in on IPOs (other companies, like TMO or TTN; brokerages like E-Trade and Wit Capital; or just purchasing the SFE companies for less than the rights' prices), then Safeguard might as well turn itself into a management consulting company and get out of the offering business. Good luck to all (we'll need it), --John