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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Karl Drobnic who wrote (27376)	2/2/1999 11:29:00 PM
From: Karl Drobnic	Read Replies (1) \| Respond to of 31646

Interesting stat: Yesterday, 80 people visited the "Original Topro Story" page I maintain on my website. Since that story is now 2.5 years old, it's safe to assume that most of those 80 are people newly interested in TAVA. It's a strong indicator of growing new interest in TAVA.

To: Karl Drobnic who wrote (27376)	2/3/1999 9:49:00 AM
From: JDN	Respond to of 31646

OH KARL; You are singing music to my ears!!! Just so happens I agree with you and have felt that way all along ONCE I saw the tremendous customer relationships being developed. Believe me, if they are in tight with these customers the business will be there and they will go out and BUY the technology if they dont possess it already. JDN

To: Karl Drobnic who wrote (27376)	2/3/1999 10:45:00 AM
From: Rick Bullotta	Read Replies (2) \| Respond to of 31646

Karl: Please elaborate... I'd like to better understand the models that would put a long term price in the $22 range. Not to say we might not see high spikes, but I think it likely we'll see some flattening or decline in earnings 12-18 months out, followed by re-establishment of growth a couple quarters thereafter. I don't disagree that it is possible in this very wacky market, but then again, there doesn't seem to be any logic to valuations these days... Here's two extreme scenarios that make it difficult to gauge TAVA's valuation: On the low end, let's look at the acquisition price of Mangan (arguably in TAVA's core business, and not significantly smaller), for example, as a percent of their revenues. You've suggested that they went for about $2MM on $12MM or so of revenues. Apply the formula on a macro scale to TAVA. At $150MM revenues, they'd garner an acquisition price of $25MM ($1.00 a share). Obviously not the case. Add a multiplier just to be nice <g>. Still way short of even my #! So that's the bottom end... Let's also try a comparable on the upper end, which might be Sapient (SAPE). These guys somehow managed to get a billion dollar valuation (currently trading between $60 and $70 a share) on revenues slightly less than TAVA, almost the same shares outstanding, but at higher margin/earnings (though '99 should even the earnings picture between the two). So now we have an upper edge. Needless to say, tough to triangulate between the two points ($1.00 and $70.00) and make any logical conclusions other than "it'll fall in between the two". <g> Time will tell. I have a few ideas to help them replace the Plant Y2K One software revenues that I'll be discussing with them in the next month or two. Trying to track Kevin down is tough, though! See ya.

To: Karl Drobnic who wrote (27376)	2/3/1999 11:56:00 AM
From: Mr Logic	Read Replies (2) \| Respond to of 31646

Karl, there are an awful lot of assumptions here. If we credit TAVA with $80m current sales - based on $20m last Q rather than take the $56m trailing sales - then at $7 1/2 they trade at about 2 x sales, 15 x earnings. It is hard to see how they will acquire good fit accretive companies at 0.1 x sales as you suggest, and even harder to see how they will multiply the value of those acquisitions twentyfold to match TAVA's own ratios. And that's at a $7 1/2 price. The 'torrent of cash' and $1 earnings is also very speculative - we still need to see the money here. TAVA's #1 issue absolutely must be to plan the transition from the 'easy money' profitable Y2K work. If I were long (I have no position long or short) I would want to see real evidence over the next few months of TAVA reducing Y2K as a % of overall revenues as they undergo transition to a very different company in 2000 and beyond.