To: V$gas.Com who wrote (23783 ) 4/4/1999 1:52:00 PM From: Dave Gore Read Replies (1) | Respond to of 44908
** THOUGHTS ON TSIG..... STILL A GOOD INVESTMENT? ** I must admit, I just put TSIG in a corner of my portfolio and forgot about it. It seemed to be a stock that needed a few more months. I viewed it as a stock that was either going to make it big or not make it. Sure you could get swept up in trying to make a few cents and day or week trade it, but why bother? It was either going to $5 dollars in 1999 or down the tubes. Well, with the recent negativity is was time to take a new look. I would appreciate comments from Dixie, V$gas, Andrew H, and others who know this stock really well. PRO's: 1) The MusicCard Alliances: With alliances with such entities as the Babe Ruth Youth Baseball League (over 900,000 members), Tampa Bay Lightning, and others, and the excellent music website from which I have ordered and received CD's personally, the liklihood that this company is any kind of scam is extremely unlikely. 2) Gordon has not sold any shares in recent months and has $5 million or more of his own money tied up in TSIG. Quite an incentive to make it succeed. 3) The list of those who filed to sell some 2.2 million shares is only about 1-2 days trading volume on a busy day 4) The cash flow problem (if a problem exists) should go away extremely quickly as MUSIC CARD's are sold. That whole program is front-loaded, designed to bring in lots of money fast and upfront. $10 per card and most of it coming to TSIG before or simulaneously to any orders being placed. 5) The list of quality people and infrastructure that have become part of TSIG in the last few weeks and months is impressive 6) The PR firm, the same that represents Amazon.com is certainly impressive. PR firms of that stature do serious DD on a company before taking them on as clients. Many may not understand that when you have a great reputation, you cannot afford to take a gamble on a BB stock unless you are quite certain is will be a big success. 7) Many SI members have actually visited the Corporate HQ and spoken in depth with Gordon and others. 8) Company is now reporting. CON's: 1) The share situation is at best confusing and need to be addressed directly. This would give shareholder a clear picture of dilution. It appears that according to the recent filing that there are about 50 million fully diluted shares. Not in itself serious (look at Amazon's stock price, shares outstanding, and magnitude of losses) but if shares are being added to employee programs, PR firm compensations, etc., they better be restricted and highly incentive based. 2) Company has done a relatively poor job of giving shareholders a vision and especially a "progress report". Hopefully the new PR firm can correct these ills. 3) Company has it's share of detractors and daytraders. What can be done to attract more long term investors who believe? 4) Is is true that some new hires are not working out? What is happening inside TSIG? Look like loads of talent, but how about some updates on the MusicCard sales, website, how smoothly things are running, what Phil Esposito is doing lately, and what is the cash flow siutation at present? In short, lots of favorable building blocks but we need a progress report. ARE WE FAIRLY VALUED AT 30 CENTS? At under 30 cents this stock seems incredibly underpriced, especially based on the extremely high revenue and margin potential of the MusicCard, which is designed to bring in revenue up front. That should cure any cash flow problems real quick in the very near future with 900,000 youth baseball players, and other organizations, selling their hearts out at $10 a piece. EXAMPLE: If only 200,000 kids participate (less than 25%) and each sells just 5 cards, with only 50% of the revenue coming to TSIG, that equals: 200,000 x 5 cards each = 1,000,000 cards x $5.00 to TSIG = $5,000,000 up front to TSIG. That is an extremely conservative number I believe. COMMENTS ANYONE?