Wind River going up, up, up! Message Board

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Technology Stocks : Wind River going up, up, up!

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To: Mark Brophy who wrote (1196)	6/4/1997 2:57:00 PM
From: Michael Greene	of 10309

M. Greene wrote: >>Here are the revenue numbers for WIND and PTEC for the last five fiscal years. WIND -- PTEC 66.47 -- 78.14 44.86 -- 51.97 32.78 -- 110.00 27.82 -- 66.58 25.17 -- 61.02 WIND's revenues have gone up 164% in four years versus 28% (6% ANNUALLY) for PTEC. M. Brophy wrote: >>Wind River had $25.053m in revenues in 1993 and there were 10.455m shares, or $2.40/share. Before the secondary offering and the stock split, revenues were $44m and there were 15.491m shares,or$2.84/share. The increase over the 3 year period is 18%, or 6% annually. This represents a slow growth rate and is substantially less than the 164% that you dreamed up. The company has a bright future, but the rear view mirror looks very grim. Mark, the words mean just what they say "in four years" and the calculation is straightforward, 66.47/25.17 = 2.64 or an increase of 164%. If you would like the number annualized it is 27.5% per year. In addition to this same overall increase calculation for Phoenix I added an annual number only because you had stated one (30% ANNUALLY)which was sharply at odds with my calculation. Why would you ignore the most recent fiscal year in your calculation of annual growth or maybe that is obvious. Much more perplexing is the rationale for your calculation. You have got to help me with this, maybe I am not quick enough to get it. If I follow your logic and a company's revenues (let's say $100 mil/year) increase to $150 in the next year but they have a 3:2 stock split (say 20 mil to 30 mil shares) then we should calculate 100/20 = 5 for year one and 150/30 = 5 for year two and therefore conclude that the company has shown no true revenue growth. Is this what you really mean? It couldn't be. Please explain.

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