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Technology Stocks : Net2Phone Inc-(NTOP)
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To: Mohan Marette who wrote ()8/26/1999 8:21:00 AM
From: Hawaii60  Read Replies (2) of 1556
 
To any business reporter:

I am writing to bring the following extraordinary newsworthy item to your attention.

As you may know Net2phone Nasdaq NTOP just debut 26 days ago.

The company was spun off by IDT corporation Nasdaq IDTC in order to enhance shareholder value. NTOP was filed with the SEC and America Online, GE, Softbank all became partners. The offering has turned out to be a huge success. IDTC retained 57% ownership of NTOP or 28 million shares. There is a total of 44M shares.

Here is the newsworthy item.

Today NTOP closed at $70 per share

Today IDTC closed at 29 1/8 per share.

IDTC owns 28M shares of NTOP.

NTOP closed today at 70. Therefore 70 * 28M = $1.96B market value.

IDTC has 35M shares outstanding.

$1.96B (NTOP valuation) divided by 35M (IDTC shares) = $56 per share.

Without taking the intrinsic value of IDTC there seems to be a problem in Wall Streets evaluation of IDTC that will surely be corrected in an efficient market.

In a nutshell if you own buy a share of IDTC right now for $29. You immediately own $56 worth of NTOP. That is without assigning ANY value to the core business. Considering that IDTC is already almost a billion dollar profitable telecommunications company with its own ISP etc. and a consistent growth rate of 70% per annum. Most analysts that follow the company would conservatively value the core business at $22 per share. Therefore $22 plus $56 = $78

Thank you so much for your consideration of bringing this to the publics attn.:

May I suggest that you contact Mr. Riad Said of Friedman Billings Ramsey at 703 312-9770 for clarification of these numbers. He is an analyst that follows IDTC.

Thank you,
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