Titan’s Triple Header Friday

Beleaguered and beaten down TTGLE hit the wires with three news items Friday post close. This is the first positive news in some time, so it’s a welcome relief. I knew the company had to move in a positive direction sooner or later, so perhaps the stock will start behaving a bit better from here forward.

Here’s the rundown, one by one.

First, TTGLE disclosed it had filed a law suit alleging RICO violations against one former employee of the Oblio Telecom division and a number of distributors and retailers. Furthermore, there’s another component I find very interesting. Apparently, the TTGLE is also going after individuals who allegedly were behind: “a series of disparaging postings about Oblio Telecom and its prepaid phone cards were made on various stock based chat rooms. These postings led to adverse advisory reports by firms that have followed Titan.” In essence, the company is suggesting the Oblio Telecom division was a victim of fraud, but there could have been a well orchestrated scheme to benefit from the stock’s collapse as well. Hmmm. I can’t wait to see how this will turn out. From my point of view, it wasn’t the postings that led to negative commentary from me- it was the company’s own failings which finally came out in their Q1 numbers.

The second press release really laid out the company’s plans for the future. In a move I believe makes a lot of sense, TTGLE disclosed it plans to break into a number of different public companies. The telecom division and PCB manufacturing division will be spun out into separate pub cos. The energy division will remain with the parent. Possibilities are being explored for the Apparel company, and USA Detergents, a flawed acquisition which never operated, will be sold.

I can’t say for sure if the sum of the parts will become worth a lot more than the whole, but at least shareholders will have the opportunity to invest in clearly defined, single purposed companies as they choose.

Titan also disclosed it plans to apply for a NASDAQ listing for the remaining entity- the energy division which delivered $90 million in revs last quarter. This seems a bit of a stretch as TTGLE is still carrying the “E” because it has been delinquent in its filings three times- typically, this means the stock will more likely be relegated to the pink sheets for a period of one year- however, you never know what’s going to happen.

Press release number 3 disclosed Titan is resuming operations of its phone card division, with network services provided by former partner SmarTalk. I have no idea how much damage the interruption did to their brand, and no idea if the division will be profitable again from here forward. I believe we can assume they wouldn’t have reincarnated the division if they didn’t believe they could make money again.

So- what’s this all add up to? Well, for starters, it’s an indication the management is back in control with a plan to move forward. It suggests the stock is probably worth a lot more than where it is trading, but realizing that value could be some ways down the road.

I suspect the company could have difficulty maintaining its Bulletin Board listing as the late filings are definitely a problem. However, even if the stock were to drop to the pink sheets, it might not effect the price much at this point.

According to press release #2, CEO Bryan Chance will be holding an investors conference call tomorrow – February 19th, to discuss the reorganization plans.

At this point, the stock is probably more of a buy for high risk oriented investors. If you are interested, I strongly recommend you tune in to the conference call and formulate your own opinion. No details have been published yet on how to tune in.

Comments and questions on this ongoing soap opera are welcome.

3 thoughts on “Titan’s Triple Header Friday

  1. Ok I’ll say it again your crazy. I not sure but i think the rico law is used by the feds to charge the mob and drug dealer so I don’t know how they can do that sounds like more bs to me

    Editor: Whether you think it’s BS or not, my suggestion to hold the stock for more positive news flow seems to be spot on. Now, if you’ve been holding it, today would be a good day to lighten up.

  2. I’ve gotten product from the PCB div. and it’s good and very price/performance ahead of the competition. Overseas partnerships are a cut throat business and will dilute this divisions performance; may increase revenue but hurt margins and quality.
    Much of the moves seem to be done to buy time. The core competencies referred to in the conf. call: Where were they when the acquisions were made and seem to be lost now that the companies have been purchased.

    Editor: I believe I have pointed out that the level of mistakes here suggests the management is not up to the task of expanding as rapidly as they chose to. Perhaps they bit off more than they could chew. Nevertheless, I do like the idea of splitting into separate companies.