Well I did indeed call the company, and all the directors were...

Well I did indeed call the company, and all the directors were out. Left my Melbourne number and went out to mow the lawn. Wife came rushing out to say the CEO of TZL was on the phone. Sure enough it was Wilson. He hung on the phone for a couple of minutes while she got me too, so brownie points for that. He was about to get on a plane and couldn't call back later.

I don't want to go into great detail about the conversation, as I have seen cases of Chinese whispers in the past, where accounts of phone calls to directors of ASX companies differed between the caller and the recipient. I'll stick to the outline.

Me: Concerns about revenue traction being slow to bite.

Wilson: Emphasized 3 month lag time due to 90 day invoicing and reiterated that they were 'on plan'. Admitted 2011 had been a difficult year, but reminded me of the mess he'd had to clean up (was $1m in the poo) and, to paraphrase, said that the ship had been righted.

Me: Still, money flowing out faster than in. I want to buy more but am scared of imminent capital raising, especially at big discount.

Wilson: No longer the case. However, CR is an option under consideration. Depends on how aggressively the board wants to grow the business. If they want a faster rollout of AP lockers for example then capital could be raised to permit this.

Me: New board vast improvement on old, but bothered that MB has no skin in the game. Don't normally like investing in companies where execs don't hold stakes.

Wilson: My understanding is that MB does have skin in the game. (Wasn't sure how it's structured.) Also noted that KT holds stock.

There was other stuff, but the key points I took from the call were that the posters on here expecting a capital raising might well be correct, that the company is now performing according to 'plan', at least from a board perspective if not a share price one, and that Bouris might actually have some kind of indirect holding in the company already.

This point is interesting, as I thought that board members had to declare any holding, but is that actually the case? If for example MB held a couple of million shares via a nominee company, is he compelled to reveal himself as the ultimate controller because of being on the board? Thinking laterally, I suppose if a friend like NP held shares that were later gifted to MB it is not necessary to declare anything until the shares change hands. Food for thought, anyway.

My impression was that things are genuinely on track and going okay, but that there really is a strong possibility of a capital raising. I mentioned that I wasn't impressed by the excessive discount last time. On that point though, raising money for general purposes to stay afloat is a lot different to raising money to accelerate the roll out of specific revenue generating projects, so (I hope) the board would be able to negotiate a much better deal (smaller discount to prevailing share price) when the money is 'nice' rather than 'essential'.

My gut feeling from having had such conversations many times before is that TZL are travelling okay, but not brilliantly, but that needs to be put in the context of a near death experience. If the trend is your friend then it's certainly going the right way, but financial and trade risks remain.

Finally, my own opinion is that when you have a ground floor situation like this where the unlikely downside is 100% and the more probable upside can realistically be measured in the hundreds of percent, it's an obvious spec buy, if you can afford to be wrong. The only issue is the timing, and a possible CR and volatile market make that a very tricky call. I'll be increasing my exposure, but not sure when, or whether it will be on market or via rights. I like the current entry price, but the market direction seems to have turned negative again, so I'll wait to see if there is another episode of panic.