"Speaking of entry points..." Elizabeth, Or a reference point using
another sector company to help understand what it is that makes for
a value being set for a share in the companies common stock.
.
Guess i'am really talking to myself here, as what i see as the forest
is really just some blueberry bushes. Seems easy to take those facts
available for these established mining companies that have a history
to allow numbers to be inserted into the parameters of the various
equation like modeling Russ has supplied to this thread, but how about
the level down a notch or two for these companies that seem to be
the focus more and more for us here, those holding mining rights to dirt
that may or not have a history past or present?
.
Rather than my post here trying to focus on the aspects of what makes
for possible potential, i would rather simply obtain guidelines and discover
if its possible for these unproven, no production and negative cash flow
companies being talked about on this thread with share prices very
very low, under one dollar for most, to have that dot-com-bubble'ism
to explode to Bre-X levels.
.
Eventhought most who traded into a dot-com company like the one
called pet.com or pizza.com, i think knew it was a bubble and only wanted
to do a buy at $100/share and sell at $150 or greater using that trend
that the Nasdaq was going up because it was going up.
.
But using a more real example, a company that really has a product to sell,
similiar to these explore-only mining companies that have dirt to sell,
any revenue is in the future that depends on the supply & demand equation,
where mining dirt for gold its the price of gold and cost to produce.
.
Lets assume the price of gold does a Bob Johnson and obtains
a down to earth reality non-GATA price range of
2002 $300 - $350
2003 $350 - $375
2004 $375 - $399
then can a dot-com-bubble share price like over one hundred dollars be obtained?
I'am not asking for the final reality sinks-in share price a few years
from today, but the bubble type possible.
.
Example of a dot-com with something golden to sell.
.
Red Hat (NASDAQ:RHAT) [golly, E.C. is an expert here :o)]
finance.yahoo.com
1999 - $50
2000 - $150
2001 - $10
2002 - $5
biz.yahoo.com
June 6, 2002
SmartMoney.com - Techwise
A (Red) Hatful of Rain
By Russ Mitchell
BIG NEWS IN the Linux world today:
Four small Linux distributors announced a plan to band together
against industry leader Red Hat (NASDAQ:RHAT - News).
SuSE, Turbolinux, Conectiva
and Caldera International (NASDAQ:CALD - News)
will collaborate to create a common operating-system
core called UnitedLinux.
You can smell the desperation.
Caldera, the only public company among the four,
saw its stock drop 2% on the news.
Two years ago, Caldera shares hit a high of $109.50.
Now, they're 95 cents.
... [Red Hat] a company that has failed to earn itself a dime.
A penny, even. The irony is that Linux itself is doing just fine.
It's the fastest-growing operating system on Earth,
and its share of the server market, now 27%, is climbing...
Linux, created over the Internet under the direction of
the legendary Linus Torvalds, is free.
The Linux companies — Red Hat, Caldera and the others —
have drawn revenue by stamping Linux on discs,
adding some useful doodads and selling at a high per-box margin.
They also offer engineering, consulting and other services.
Judging from the public companies' results, it hasn't worked...
That's why the big Linux winner now — and I submit,
for the future — is IBM (NYSE:IBM - News)...
Is Red Hat going away? Probably not.
(It has $309 million in cash and bonds.)
Could it develop a small, if money-making niche in the Linux business,
if it gets its act together? I think so. Is the stock wildly overpriced
even as it scrapes bottom at around $4.50? Let's take a look...
... also knew the company had no prayer of growing
into its gargantuan stock price, which at one time
hit a split-adjusted high of $151.That price was bizarre
... Today, even $4.50 seems nutty to me...
... the company says it will start making money later this year.
... consensus earnings estimate, according to Zacks,
is three cents a share for the current fiscal year,
which ends next February, and eight cents a share
for the fiscal year ending in February 2004.
OK, three cents almost a year from now.
At the current $4.50 a share, that's a P/E of 150.
The average P/E for computer-software companies is 49.
... " Linux is a dandy technology with a big future, he says,
but he's "not convinced anybody can build a business out of it."
Except IBM. "IBM has played Linux brilliantly," Raisys says.
... But remember, this is no start-up. The company has been
around since 1994. Losses have grown deeper each year
since 1998, for a total cumulative net deficit of $279 million.
There's no question, though, that company executives
have proven that there's money to be made from Red Hat
— for themselves... If worse turns to worst, Red Hat could
always become a bond fund for fixed-income retirees...
...
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