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

To: Rick Hudson who wrote (2378)	11/6/1998 1:41:00 PM
From: C. McD	Respond to of 2752

Charting the TSQD/DRIV ratio: If you plot the ratio of the prices of DRIV to TSQD, it appears that the ratio itself is on the mend. As has been established, the hypothetical price to shares ratio is ~0.3, or 30%. The day of the IPO, the ratio got to be as high as ~35% at TSQD's highest price. The ratio settled in at ~20% a few days after the IPO, then decreased linearly to ~15% over the next 7~8 weeks. The ratio fell to ~10% for several days, and got as low as ~7.5% during a lull where DRIV reached its all-time lows. Since Oct. 20 the ratio got back up to ~10% (when TSQD got above $.75 again), and appears to be increasing regularly in the direction of 15% (reached recent high of ~15% on Oct. 28, when TSQD went from 1.125 to 1.626). If this trend continues we can expect to establish the ratio back n the 15-20% region, but probably not much more than that, until something happens regarding TSQD's exercising of the option to actual own the DRIV shares. When TSQD exercises the option, they have agreed to reimburse Ronning for any tax liability he incurs for the transaction. Anyone know more about what these tax implications may be? Are we taking 25% of the transaction, or just tens or hundreds of thousands of dollars? I hope everyone finds this analysis useful, you can do it yourself by downloading the data for each stock since the IPO and plotting it on Excel (I'm not going to post the data, if you don't believe me, take the time to do it yourself). It was helpful to me to see that the trading ratio is not random, it appears to get better when DRIV does better, and worse when DRIV does worse. If DRIV reaches $20, who's to say the ratio won't be 20%, and TSQD will be selling for $4. Looks feasible, and I find the empirical data to be much more useful than calculating the hypothetical 30% ratio from the actual shares. Any thoughts on TSQD's earnings coming out, probably next week? At this point I think they can only help. Bad earnings shouldn't effect the ratio much, but good earnings just might give it a boost.