Qwest Communications (Q) (formerly QWST) Message Board

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Technology Stocks : Qwest Communications (Q) (formerly QWST)

Q 98.22

+5.9%

Feb 6 9:30 AM EST

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To: JAG2 who wrote (293)	11/7/1997 5:37:00 PM
From: Tim Bagwell	Read Replies (1) of 6846

I don't think a simple P/E calculation is valid for QWST (plus I just don't like your number). In the absense of substantial earnings in 1998 the price should reflect a market capitalization which is at least equivalent to the undepreciated assets of the company and, in particular, the infrastructure that they are deploying. In addition, the price should reflect the annualized revenue potential of these assets minus any debt. In other words, if QWST were to be purchased by another company what would a fair price be? I don't have an actual figure but at a price of $60 the market cap is about $6 billion which "feels" about right to me. Your number of $19 gives a market cap of only $2 billion which I would estimate as the value of current assets only (which is why the IPO was priced in that range). Even at $60 per share, I have a sneaking hunch that you couldn't touch Qwest for $6 billion in cash.

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