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Technology Stocks : DRIV (DIGITAL RIVER). Get in on internet IPO. -- Ignore unavailable to you. Want to Upgrade?

To: James Mitchell who wrote (430)	11/29/1998 12:26:00 AM
From: MKTBUZZ	Respond to of 3198

Makes one wonder, doesn't it.

To: James Mitchell who wrote (430)	11/29/1998 12:44:00 PM
From: David Browning	Read Replies (2) \| Respond to of 3198

James, here is something weird: TSQD selling its seed corn!! I just got around to reading the S-1 on the new DRIV offering. TSQD is listed as a selling shareholder as to 200,000 shares which it will first exercise from its 3.2 million share option. My first reaction, as when DRIV did the reverse split and price cut just before its IPO....major despair. But, we must remember that Mr. Ronning owns half of TSQD now, more when all his options are exercised: why would he shoot himself in the foot? If the sale were at today's price, TSQD would take in about $5.5 million. Pay the tax provision shown on the balance sheet, and about $3.4 million remains (unless they have other investment losses available as offset: quite possible). This is probably more than they expected in preparing the registration, but it is unclear what they intend this amount of money for, once covering some needed improvement in working capital. I've been whining around here for the past few days as to why TSQD was lagging so terribly behind the DRIV upswing. My own answer: how can a potential investor value TSQD when the shares outstanding are only a portion of the total pot including options/warrants, etc, which total is virtually impossible to determine from published reports and which changes constantly as Mr. Ronning lays on more options, etc., for himself and his insiders? If you can't determine some kind of ratio relationship between the TSQD you are buying and the DRIV shares in the option, who wants to play? Now, add the element of hard-to-understand sale of a piece of the DRIV holding, and analysis is further frustrated. It may only be 6.25 % of the total, but what does it say for the future? Are the DRIV shares in TSQD there merely to keep this little sales operation alive over time? Or (hope springs eternal!), could the excess cash be used to offset taxes due on the exercise of the rest of the option, eliminating that source of doubt once and for all? Mr. Ronning needs to come forward with some kind of explanation.