Sorry for the delay. Spoke to TSQD's outside IR dept. Very nice gentleman. Most of what we spoke about is a matter of public record, but put all together it paints, I think, a very positive picture for TSQD
holders.
1)Something which he emphasized is that TSQD is a good, solid, business. Strong management, decent financials, and interesting future possibilities with their intra/internet products. He said if the new Inet aspect of their business doesn't take off, their core business is strong. Been doing it since 1990. Hard to believe almost 10 years.
A lot of their posted losses related to DRIV's development, although I think we can all agree that was a good investment.
2)Joel Ronning is still "the man" at both companies. In fact, very important, he still owns 49% of TSQD. Think about it. Right now that is a huge stake, which nobody would want to see diminished. He said as far as he knew that was based on the 11.2 million shares of
TSQD issued, although, and this brings me to the next point, he would assume Joel has a stake of the company options.
3)TSQD has approximately 11.2 million shares issued, a little less than a million privately held, but also, about 5 million additional shares optioned. That brings a realistic and dilutive total of about 16 million shares. TSQD's most recent 10-Q authorizes a 20 million share total issue, but I don't think that's an "issue" right now. Based on a DRIV price of about 40 (we made it today!), times TSQD's 3 million shares, that's 120 million bucks. Even divided by TSQD's full share count, options and all, of 16 million shares, that's a $7.50/share price for TSQD, right now today, exclusive of the intrinsic value of their own business. Incredible. And the game ain't even started yet!
4)Okay, now what? As he reminded me, TSQD's got until the end of this year, a little more than eleven months, to decide what they're going to do with those shares. We talked about the reality of selling them. Let's take it right where it's at today, DRIV 40+. TSQD sells their shares, there's a lot of interest right now, so not too much negative price movement on the dilution, maybe DRIV's 30. Still $90 million to TSQD. I was reminded the corporate tax rate would be something like 40%. That leaves TSQD with about $54million. Then we talked about other options, say like instead of a cash dividend to TSQD shareholders, perhaps a DRIV stock dividend. Again, strictly speculation, but if you look at the numbers it makes a lot more sense for everybody. He said they're working on how to handle the TSQD share situation, and with only eleven months, would definitely expect news on it sooner than later.
5)AMAZON. He said DRIV definitely considers themselves Amazon's best option for the software market. Amazon wants to get into the software market. Amazon could try and do it themselves. I pointed out that's really not their business model. He agreed. Not really a lot of other options out there other than DRIV for doing something like that. He said DRIV has worked very hard to court the bigger accounts out there, and that attitude helped with the "Mart" sign-ups. Pure speculation at this point as far as AMAZON is concerned. I said DRIV sure does seem like a no-brainer, but nowdays it hard to say anthing for sure. We both laughed.
6)I mentioned Broadcom, since it was mentioned in the article posted today as something akin to competition for DRIV. He said he really wasn't familiar with them, and couldn't make any kind of definitive statement.
7)Almost forgot, I started the conversation with a question abou the "Intent to sell shares" for TSQD on the Edgar/SEC site, filed on January 4th. Without pinning it down, he said he's pretty sure it's just one of the senior officers who wants to have the option and not even sure if he will sell. Bottom line, nobody's dumping a lot of shares!
We both agreed DRIV's got an incredible business model, and the future bodes well for it. I'm sure I've forgotten some of the particulars, and the usual discliamers apply on any info presented here, but I'm pretty happy with the info I got today!
Good luck to all! |
