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

To: Ignatz who wrote (2318)	10/21/1998 8:31:00 AM
From: C. McD	Read Replies (2) \| Respond to of 2752

DRIV is fine, it's TSQD I'm worried about: MacUSA (subsidiary of TSQD) has the OPTION to buy 3,200,000 shares of DRIV for $1 from Joel Ronning by Dec. 31, 2000. Ronning owns approximately 49% of TSQD's outstanding Common Stock (as of June 30, 1998). Does TSQD have to exercise this option? If it is at all possible that TSQD could NOT exercise this option (is it?), that would explain TSQD's current trading range. If they do exercise the option, TSQD will own more shares of DRIV than were sold in the IPO (3,000,000 shares). Will Ronning really do this to DRIV, even if he could be the primary beneficiary. Is it possible that he has some plan that the average investor isn't privy to? If TSQD owns 3,200,000 shares of DRIV, this would be an unimaginable windfall. They would make more money off DRIV that DRIV did off its own IPO. TSQD's 11,000,000 shares of common stock (according to last earnings report) would each assume the value of 0.2909 shares of DRIV (as far as I'm concerned, .3 is the actual multiplier, people can use .19 or whatever they chose if they like). I just find it very hard to believe that TSQD will ever actually get the 3,200,000 shares of DRIV, or that TSQD will ever benefit to this magnitude. It just seems that the wording of TSQD's "option" to buy the shares for $1 may never materialize. If it ever does OWN these shares, TSQD <$1, almost regardless of DRIV price (unless it too becomes a penny stock), will be an incredible buy. So why aren't people buying? My opinion is that 1) they think TSQD will never see the DRIV shares, 2) they think DRIV will be a penny stock within the next couple years, or 3) a combination of the two. Having already discussed reason 1, I also think reason two has validity given the nature of tech/internet stocks in general. DRIV has a lead that could easily disappear in a short period of time unless they are on top of EVERYTHING. Paradigms change on a weekly basis on the web, just look at how things have changed in the last year. Things are scary, but until reason 1 or 2 become more apparent, TSQD seems to be an exciting risk at <$1 IMHO. Comments please:) BTW - I came away with a positive attitude from DRIV's conference call last night. In the short term, they appear to be doing things right. Points I found most interesting: - Didn't discuss missing analysts estimates by $0.01 - Said Egghead is a prospect - Plan to have 2,000 clients by end of year - Said their client list is so inclusive, they prefer to list who ISN'T on their client list. - They are aggressively working to add the software publishers that they don't already have (Oracle, Computer Associates, Microsoft, Adobe), and they especially noted that they are working hard on MSFT. - DRIV is ~50% larger than their competitors? If almost everyone is their client, shouldn't this be more? - Biggest competitor is not another firm, but the internal systems groups of the firms they are trying to recruit. Kinda sounds like how Frontpage developed software to help people build web pages, and their competitors were the folks that wanted to do it themselves. Eventually Frontpage was bought out by MSFT. What if a firm started to sell DRIV capabilities to the internal systems groups themselves, that could really hurt DRIV, unless they were to do this themselves. my $0.02.