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Microcap & Penny Stocks : Rocky Mountain Int'l (OTC:RMIL former OTC:OVIS)
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To: Steve Borgdine who wrote (26583)12/12/1997 10:57:00 AM
From: steve johnson  Read Replies (4) of 55532
 
Just some thoughts about company valuation:

If the $5million in equity financing is locked up in none tradeable shares for two years then you can consider that the same as treasury stock for valuation purposes...i.e. you get the value but don't have to split the pie. So RMIL stock value added per share is $5mil/3mil outstanding shares = $ 1.67 per share.

The $5 million debt financing can be thought of in the same way. Additional capital but the pie doesn't split because debt has no ownership rights (at least not normally)...so same process $5mil/3mil outstanding shares = another additional $1.67 per share.

Total value added is $3.34 per share. Plus current market value of $1.12 = $ 4.46 fair value per share after the deal is complete.

The question is if this company was listed on the AMEX or NASDAQ national markets would we have seen this price jump already figured into the value....or put another way..are the MM's keeping a good stock down?

This analysis was based on fundamental value and lots of assumptions until we get the financials. In addition, this does not take into account the squeeze value of this company which can be significantly higher than the $ 4.46 fair value.

regards,

steve johnson
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