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Technology Stocks : Data Dimensions

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To: B. Pasternak who wrote (693)4/17/1997 9:40:00 PM
From: B. Pasternak   of 4571
 
I just bought a the p\e interactive cd that ddim touted in a press release that reviews some y2k stocks including ddim. It sells for $14.95 (maybe pretty soon the deal will include a free ardes 2k cd as well). Well, the estimates for ddim are 1997 revenues of
31 million, net income of .45 per share, and 1998 revenues of 48 million and net income of .62 per share. So, lets assume these highly optimistic projections are achieved and they make $1 per share by the end of 1998. Can anyone figure out how much they need to make in 1999 to justify the stock price. Let me give you a hint: 19 + 1 =20.
Fairly valued ?
Here is a cd which contains earnings projections that ddim issued a press release touting. If ddim thought they would do substantially better than the p\e interactive cd estimates, do you think they would be promoting it ? ddim management are not incompetent, they are just
downright stupid. They don't apparently realize that the discounted cash flow of $1 is less than $1, not $20. On the other hand, since they've been selling their stock, at least they realize that the discounted cash flow of $1 is less than the $57 pre-split sales price they got.
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