In my opinion this review makes abetter case for being SHORT not long:
The numbers
:(As of 11/24): $19 Revenue (1997): $0 Return On Equity (97): N/A Proj. 5yr EPS Grth: N/A Shares Outstanding: 15.8 Dividend Yield: - - Mkt Capitalization: $300 Mil. P/E - -; - - : N/A; N/A Current Book Value: N/A Convertible: - -Debt-to-Capital: N/M Disclosure(s): A,C
In short CDRD has NOTHING in the way of numbers......
The future:
I like this statement: "It is scheduled to be available by Christmas 1999." ....in other words, nothing to produce any revenue until the year 2000 IF it goes on schedule.......
"Strong consumer demand is forecast by several independent market research firms with penetration levels of more than 16% by 2005.".......alot can happen between now and the next 8 years. It seems to me that this is a story stock MAYBE for 3 years from now if AT ALL.......
"Our 12 month price target is $39 based on a discounted cash flow".....this statement is a mystery to me!? In one year the company will still have NO revenue, No earnings and more existing stock, ie. dilution......how does this guy figure the stock can more than double???????
"High Yield bonds priced at 15%."....that is a back breaking interest rate, in my opinion......
" Shares Outstanding: 15.8 million".....he doesnt mention that the shares outstanding will INCREASE to approximately 30 million in 2 years.....
"CD Radio has produced prototype equipment".....this company is STILL in the prototype phase. Not even a finished product yet! For all you know, it may not work..........
In short, this is an incredibly speculative company with nothing proven, alot of assumptions, no products or revenues for a MINIMUM of 2 more years, and a constant BURN for cash.......way to early to be buying this one , in my humble opinion.....best of luck....;^) |
