waiting patiently !, page-27

Hi Goldstandard

You seem to be an intelligent person with what appears to me to be an experienced and logical thought process on share investing/speculating/gambling. I hope you don't take offence but from the outside looking in (ie I am not invested in TZL) your continued reference to TZL does appear to be motivated by a perception that the market is treating TZL unfairly. To be honest, with the research I have done & what I know about PIE I belive we could make a similar case that PIE is being treated unfairly by the market as well.

In reality however, we all know that this is the life of a small cap investor (thus my comment above on investing/speculating/gambling) where it is not about when you have potential or reach that potential, but when the market recognises it.

If anyone is interested in a long read about what can happen in this sector I have attached a link below which I found a fascinating if not scary read:

http://www.deepcapture.com/michael-milken-60000-deaths-and-the-story-of-dendreon-chapter-1-of-15/

This is a story about small cap investing in the USA and some incredible circumstances that can influence small cap share prices. I can't take credit for this as a poster from the MEO thread approx 6 - 8 months ago put me onto this (sorry can't remember his name).

Now, back to PIE.

I have responded to your points below:

1. What is the size of the market?

I believe huge, in fact massive if you understand what their niche in the market is. Plenty of previous posts exist regarding mobile phone data usage increases & the benefits of wifi technology together with NBN (I believe this is a part of their niche). Have to be honest & acknowledge that I am not a technology guru (have trouble setting up an e mail account) but my brother is very experienced with a number of degrees and 10 years + experience in the industry. He understands that there are competitors and the base technology is not entirely unique, however this product has been developed over 11 years with constant feedback from large telco's and is based on wide market appeal, functionality & flexibility. I understand a solid business case and believe PIE is in the right place at the right time and after he tried the Webphone and based on our joint knowledge he has recently invested in PIE.

2. What is PIE's targeted market capture?

Telstra, Australia, USA or the world, who knows. Can't help thinking this is a premature question as surely their current focus is establishing the commerciality (not viability) of their product. CEO Cam Smith has been working on this for 11 years & I believe if you talked to him, you might get a sense of his belief that we are on the 'cusp of enourmous growth'.

3. What would the expected terms of a JV?

IMHO, the current goings on are more about negotiation. Whilst it may seem perverse to some, I really like the fact that there is no hype from management in terms of market releases. To me and what I have seen in some large negotiations, each side becomes fearful of saying anything to anyone for fear the other side may get an advantage. Maybe this is optimistic but there is a significant chance this is indicative of late stage negotaiotions. Anyway I hope so.

4. What will PIE profit margin be?

As per point 3 above, this surely would be sensitive to current negotiations. Once the commerciality is established PIE can let the general market know more specific details. By way of comparison, a mining company cannot tell you extraction costs until they know the depth & concentration of their resource.

5. What experience does the company have of taking new inventions to the market, as well as delivering shareholder returns?

Is this a contradictory question in the small cap market? By nature the current product (or in mining - the discovery) is new and unknown. The recent board appointments of Bill Zikou and Justin Milne (not just appointment but their acceptance of the roles) represent compelling evidence of PIE's approach to both of your points, and more.

6. How much capital will be required to take the product to market? $10m, $20m, $50m?

This is reliant on the contract with Telstra (if completed) and I think that both the minor party & major party would have factored this inot negotiations. What I am getting at here is that either Telstra fund it or that the contract itslef is very conducive to a capital raising to fund any capex at a significantly higher share price.

7. Why is there no good news to accompany this rights issue?

Think this has been discussed in prior posts as well as point 3 above.

A lot of mining (and other) stocks can appear to hype up their company on the mere potential of a deal with a large cap company and I really like the way PIE have played this to date. If Telstra do come on board, your credibility is still in tact and IMHO then would be the time to ramp up.

8. Do you not think that a company with one product and one customer engagement, is overvalued at $20m and presents far to much risk?

Simply, no, not at all. Some would have sid the same about Microsoft 35 years ago (not comparing PIE with Microsoft) but as per my first paragraph, market perception & recognition is the the key. There is both an argument to say it is overvalued, but I believe a more compelling argument to say it is significantly undervalued/unrecognised.

9. When talking about valuations, peer comparison is essential. To bring TZ up again they are valued at 1.5x PIE but have Microsoft, Dell, Pitney Bowes, Anxiter and have just opened an office in Silicon Valley to be close to other major customers such as Yahoo, Intel, Google, Facebook etc. PIE has a 50 webphone trial.

Again, refer my first paragraph.

10. It has been over 1 year since the initial engagement with Telstra. Why is this taking so long?

I honestly don't believe that 12 months is that long given the size of the deal. This is a company making deal for PIE if they can seal the deal and Telstra know it. By Telstra stringing the process out with an exclusivity agreement in place, they can't lose IMHO. It may give them time to find out more info & maybe this is why PIE are holding tight with market releases.

Enjoy the debate & welcome a differing point of view.

My post is probably too long but if I have even partially altered your view then hopefully you will consider a partial investment of the 'substantial amount' you have available.

I have said it before but will say it again, Wayne seems to know!!!

Regards

TT