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Stocks K / Koala Corporation


Subject:  Re: Q2 Results Date:  8/11/2001  2:11 PM
Author:  sleejohnson Number:  195 of 197

I can completely see your point of investing with high risk for future return. I just wanted to make sure that everyone was aware of the relatively high debt.

I take it you are TFV?

I probably should have been more clear in my post that "weak balance sheet" included the substantial debt burden KARE carries. I should also clarify that when I say KARE is "fairly valued" at 3.00, that is NOT my version of a "buy" recommendation. I try to buy companies at prices well below fair value. I don't think I would pay more than 1.50 for KARE based on what I know right now.

I believe the current price of about 3.00 reflects the expectation that KARE will be able to get a new credit facility on fairly decent terms. Therefore, I'm not expecting any spike up if/when the terms of a new credit facility are announced and I think there's a good chance the price will go down if the market is not pleased with the terms. Do you have a view on this?

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