To: Suzanne Newsome who wrote (29807 ) 6/1/1999 11:29:00 PM From: Zeev Hed Respond to of 44908
Suzzanne, I have looked only into really one issue, the proliferation of shares (whether by self donation, conversion of debt or the PP). The thread tried to start and model some of the businesses, like the Music Card, and one distributor was kind enough to inform us of the structure of a typical deal, we learned that selling the cards themselves through the distributor contribute nothing to TSIG's bottom line, since the charity gets $5/card and the distributor gets the other $5, of which about $2.5 goes to cover the distributor overhead and the other half to the distributor (to cover his initial investment and a little profit for his toil, which IMHO, he is surely entitled to). Ztect was going to spend sometime and find out how does TSIG make money in the process. I presume that those cards that are used to buy musical merchandise, would probably generate some margins, but since the prices are the lowest in the industry, that could not be too much. Since the cards are going to be customized to each charity, I presume there will be some minimal overhead costs to manage and execute such customization. Maybe you people should take it from here and first assess if indeed the number of cards expected to be sold yearly (I believe it was 10 MM, according to TSIG news release, I believe in March?) is indeed rational, taking into account that only a small segment of the target students engage in charity selling. Then one should try and estimate, of these projected 10 MM cards, how many CD are really going to be bought. The second business, the telemarketing business and the Signature deal, is even simpler, right now, there is, supposedly, on the table a $30 MM contract, there were some talk as to how many calls that would cover, and I am sure someone could come up with a rational approach as to what cash might be thrown from that to the bottom line. My personal opinion is that Gordon failed miserably in this business before, so I do not see how by changing from commissions to time billing he is going to improve much, but this is my opinion, and it does not carry much weight here. I am sure that others have opinions as valid if not more than mine, and it would be interesting to see their "spreadsheet" like analysis. A discussion of these specific details would certainly be better than all the non sense posts on this thread. Oh, for this quarter, it would be wise to take a one time charge for closing the Western Division. Typically, when a company announces the closing of a division, they do attach to the same PR an estimate of the charges such closing will entail, TSIG chose only to discuss the $150,000 in overhead savings for one reason or another. Zeev