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Technology Stocks : IDT *(idtc) following this new issue?*
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To: blankmind who wrote (13259)8/23/1999 10:53:00 PM
From: AGORA  Read Replies (2) of 30916
 
Blankmind, our IDTC $32-34 valuation comes from the following:

Keep in mind the price of NTOP changed drastically since Friday, so we now have to revise our numbers up to account for today's price movement.

1] IDTC now holds approx. 28 million shares of NTOP with a market value of approx. $1.3 Billion

2] Given that IDTC has approx 35 million shares outstanding, each share holds $36 per share in NTOP alone. In other words, if IDTC were to sell every share of NTOP today, shareholders of IDTC would receive a benefit of $36 per share.

3] Current price of IDTC stock = $22. If you add in the NTOP value of $36,then you get $58.

4] However, we must assume that some component of current IDTC stock price comes from NTOP holdings. In other words, NTOP holdings is factored into the current price of IDTC stock and we do not want to count it twice. We will assume 50% of current IDTC price comes from NTOP holdings - $11

5] Our $58 valuation from #3, minus the $11 from #4 = $47

CONCLUSION

Current fair value of IDTC is between $44-47. Why has the market not given this value to IDTC? As we stated on Friday, NTOP must prove itself at current levels (maintain price for a period of time satisfactory to the market) before bidding up IDTC. If this occurs, watch IDTC moved rapidly into the high $30's...but this is a big IF.

Given that we are long on both, we are hoping to see both stock prices benefit.

Regards,
AGORA
agoracom.com

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