YEEHAW CANDIDATES Message Board

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Strategies & Market Trends : YEEHAW CANDIDATES

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To: Sergio H who wrote (2303)	6/18/2003 7:58:59 PM
From: Ken W	Read Replies (1) of 23958

Sergio "Ken, I disagree with your evaluation of IFLO's potential. This company was designed to develop a market niche and to be bought out by a larger player with the clout to exploit this niche. The buyout price, when it comes, won't be based on P.E. or book value, but on the potential market and potential market share." We disagree...I love it!! Common rule of thumb on a buyout is 2.5x book value. Goodwill no longer counts as that has been taken out of the equation by the new GAAP rules. PSFT is a perfect example...book is 6.43. ORCL offered on first bid 16ish (2.5X book) hmmmmmmmmm. I'm not arguing that IFLO has great potential for a larger company, but with little cash and not much in the way of assets + a bit of debt, all the suitor would be getting is potential "somewhere" in the future. With the current attitude toward looking forward I'd be willing to bet that not many companies would want to look that far into the future, not over 5 bucks per share anyway. LOL Using the 2.5x book would make a minimum bid on the stock of 4.45ish. Your court amigo. Ken

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