As of Friday's close, PGTV, which had 594,422 subscribers as of August 31, 1999, had a market cap of $883.7 MM. Therefore, each of PGTV's subscribers is being valued at approximately $1,487.
At Friday's close of 11/16, MDTV's 10.2 MM shares are being valued at $7.013 MM, which means that each of its subscribers are being valued at approximately $501. If MDTV's subscribers were valued on the same basis as PGTV, the stock would have a value of approximately $2.04 per share. Arguably, MDTV could command a premium given that its rate of growth exceeds PGTV's rate of growth.
Conversely, the Form 10SB12G that was filed with the SEC on May 12, 1999 disclosed that MDTV needed to raise $4.0 MM to fund its business for the next year. To date it has only raised only 43% (1.709 MM) of that amount. Given the current stock price, raising the remainder of that amount could result in some significant dilution. With the stock currently at 11/16, the company would probably have to sell stock at $.50 per share. If the remaining $2.291 MM were raised at that price, the company would have to issue an additional 4.582 MM shares. Add those shares to the 10.2 MM outstanding and you have a total of 14.8 MM shares and a market cap of $10.2 MM, which values each of MDTV 14,000 subscribers at $729. Using the PGTV valuation, the stock is then worth $1.40 per share.
The above is just the humble opinion of my calculator.
Form 10SB12G:
sec.gov
The Company is seeking US$4,000,000 in equity financing through private placements in order to execute its business plan through the twelve-month period ending April 30, 2000. Approximately one-half of that amount will be used to defray subscriber acquisition costs which are primarily the purchase of television set-top boxes, MDU rooftop equipment and wiring costs. Approximately CDN$500,000 will be used to grow through the acquisition of small satellite master antenna television (SMATV) systems whose subscribers represent potential additions to the Company's Star Choice subscriber base. The balance of the financing proceeds will be used to finance operating costs and working capital needs. The success of the Company is dependent upon its success in obtaining this financing. |
