$+$+$ Due Diligence on ROBO and "MemCall" Technology...
I spent over 30 minutes on the phone to Rafael Aravot, co-manager and Director of ROBO... Here is what I learned, besides the fact the 10K is supposed to come out tomorrow...
1) Basic Stats from SEC Filings...
Outstanding: 11.8 millions shares, including some 500K shares still in Treasury, that can be sold on a "as needed" Private Placement basis, to raise development Capital, once the share Price is back up again.... A recent P.P was done for 84,000 shares @ $11.90 and raised $1 Million... Float: about 4 Millions shares.... As of September 1999, Assets: $17.4 millions.. Liabilities: $10 Millions... Contact Phone #9725-2931212...
2) Latest PR about Company Re-organization...
biz.yahoo.com
3) Business Model...
ROBO has a number of irons in the fire and the split of the various Divisions is explained in the PR... What interested me is the following:
+ The joint venture with the Japanese, YET is very profitable and Revenues of $10 Millions and Earnings of $2 Millions are projected in 2000...
+ Their traditional activities of teaching Computers and Robotics Science is now being supplemented by electronic teaching via the Internet, which should greatly broaden the tuitions scope and the Revenue...
4) Mini CMGI in the making...
The most interesting Business Division integrates: Distance Internet Learning, Swapstation (70,000 members, 1.2 millions music titles), MemCall and other potential acquisition in the encryption field... They will all be organized in such a way that they can be spun-off as IPO's, when mature, in order to maximize value to shareholders...
5) "Call Out Memory": MemCall has HUGE POTENTIAL, IMO...
ROBO has found a way to INCREASE THE RETRIEVAL SPEED of information stored in ANY TYPE of EXISTING MEMORY DEVICES, by an average of 60% to 70%... The invention can easily be fitted to all existing computers/servers, IS FULLY SCALABLE and doesn't necessitate the design of new Chips, as it uses existing technology... This means it could well hit the Market sometime in 2000... One Patent has already been applied for and in total, there should be between 10 and 15 patents covering all potential applications... ROBO believes the Market for this new technology is in the MANY BILLIONS of DOLLARS...
To ensure Credibility, an Expert Independent Report on the Invention has been commisionned and is due out shortly... ROBO will come out with a lot more details about its new "Architecture for Accelerated Information Retrieval" when all the Patents are in place and the technology proven beyond the shadow of a doubt to their Peers...
6) Conclusion...
My Earnings projections for Year 2000 is just under $3 Millions and include a hefty rent paid by Siemens, who has coincidentally relocated its Corporate Headquarters in Israel, in ROBO's own Building... This figure does NOT INCLUDE any potential income derived from MemCall... This equate to about 25 cents/share and a PE between 100 and 150, to reflect the enormous potential of MemCall, would lead to a projected share price of $25.00 to $37.00, my Primary Target...
However, if one looks at AKAM, a Company specializing in increasing the speed of Internet, with a $15 Billions Market Cap, $4 millions in revenue and $56 millions in Losses, one would probably conclude that MemCall could well drive ROBO's Market Cap to a mere $1 Billion... This could then result in my Secondary Target, a share price of about: $85.00...
quote.yahoo.com
7) Disclaimer:
This is only the personal opinion of a potentially biased long, not a recommendation and no responsibility is accepted for errors or omissions... Would-be investors should carry out extensive Due Diligence and only invest what they can afford to lose...
JMHO, F. Goelo + + + |
