Robert, < Where have you been? >
I have been watching ALYD and I thought that we would break through
the 26 3/4 barrier on the day of the Conference. However, after I
read the press release and went through the numbers, I sold all of my
ALYD stock at $26 1/4.
The numbers that were related in the press release did not impress me
at all. biz.yahoo.com
It seems that others may have also bought in on the initial press
release, but after they crunched the numbers, like I have, the stock
sold off.
What disturbs me about ALYD's numbers
six months *Est. year
ended Jun. 97 end Dec. 97
Payroll &
related expenses: $6.4 million $12.8 million
Other Expenses: $1.2 million $2.4 million
========= ==========
Totals $7.6 million $15.2 million
* keep in mind that this is an est. ALYD says "Our goal was to
bring in 15-20 people per week and train them accordingly." " we have
started hiring a targeted 100-150 people over the next few months."
alydaar.com The more they hire the
higher the year end expenses will be.
In the Aug. 15th news, that was linked above, Gruder stated that they
had 270 employees. If we assume that they added 5 people per week
from the Q ended in June to the above Aug. 15th news. This would
make the total number of employees at the end of the June Q approx.
240
If we then divide the total number of employees at the end of the Q
ended in June = (240)By the total payroll costs for the six months
ended June 97 = $6.4 million
We get that each employee made an approx. avg. of $26,600 for the six
months ended in June or will make an approx. avg. of $53,300 for the
year end 97
Each employee makes an approx. avg. of $4,440 per month
Now if we remember Gruder's statement that ALYD plans to hire 100 to
150 employees in the next six months. (stated in the Aug. 15th news
referenced above), we would see that at even a additional 125 extra
people in six months would work out to about 20 people per month.
From Aug. 97 until the year end in Dec. 97, that would add an
additional 80 people.
First 20 people would make $4,440 for 4 months = $355,200
Second 20 people would make above for 3 months = $266,400
Third 20 people would make above for 2 months = $177,600
Final 20 people would make above for 1 month = $88,800
Total = $880,000
Now we know that original 240 people would get the approx. $53,300
per year = $12.8 million
If we add the additional $880,000 for the 80 new employees, we get a
total of $13.7 million for payroll alone by the year end 97.
We also can't forget to add the "other expenses" figure which was
$1.2 million for six months ended in June 97. If we double his
number to represent the figure for year end 97, we get $2.4 million.
That makes the est payroll and other expenses for year end 97 at
approx. $16.1 million
"we would expect revenues of $10-$15 million for full year
1997"
biz.yahoo.com
THERE IS NO WAY IN HELL THEY WILL BREAK EVEN BY YEAR END 97
Furthermore, ALYD said:
"we believe that our prospects to achieve revenues of well in
excess of $50 million for 1998 and in excess of $100 million for 1999
are good." biz.yahoo.com
I don't think it would be out of line to say that by year end 1998
ALYD will probably have over 600 employees. Hell, at one time Gruder
said that they were going to have 1,000 by that time.
even with 600 employees at an avg. of $53,300 per year, that adds up
to $32 million in Payroll alone. And since "the other expenses were
approx. 17% of payroll, they will probably have approx. $5 million in
"other expenses".
That could make 1998 total cost as high as $37 million
That makes total revenues for 1998 at about only $13 million
Lets say they only will have 20 million shares outstanding by year
end 1998, {note with NASDAQ listing they will probably have a lot
more than that outstanding)
That comes out to about earnings of $0.65 per share
even at a P/E of 60, that would make the stock worth $39.00
NOTE: AT CURRENT PRICES, WE ARE AT ABOUT 38 x 1998 est.
earnings.
This is WAY TOO HIGH! I am now convinced that Hype has moved this
stock way out of reasonable valuation. ALYD may go higher, it may
not, but when KEA is trading at a PE of 60 with solid earnings and
another company I am invested in has a fully automated solution that
is doing conversions with a staff of about 25 people, ALYD does not
presently interest me.
I was very disappointed with the numbers I saw in the release.
JMHO - Tech
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