No one can now or when the stock was 3 1/2 recently put a figure on what VOD means to CCUR. The potential is enormous but it is too early to tell what success the VOD industry will eventually have, or CCUR's
future role in it. My personal opinion is that the industry will eventually be quite successful, because Video stores and scheduled hotel movies are archaic ways to deliver the product, but that CCUR will not have a large role in the industry, but might well have a large role relative to the size of the company.
I have always thought of CCUR as a stock with inherent value based on real time business (which poster Mr. Olivier has recently suggested is $2.50, and I think is less) plus an option-like value for the value of VOD.
As the VOD industry makes progress or not, the option value fluctuates. As Concurrent makes progress or not within that industry the option value fluctuates even more, and can lead to core fundamental value as they get contracts that have real value. As speculative fever waxes and wanes the option value fluctuates yet more.
In my opinion, whatever is fair value for this VOD option was somewhat enhanced by the recent announcements. They appear to be making the kind of progress consistent with someone who has the products to be a player in the VOD industry. That means we are closer to converting some of this option value into real fundamental value.
If sophisticated investors believe, through private conversation with Corky, that his forecast on the conference call of 20% revenue growth for the fiscal year beginning 7/1/98 largely driven by VOD is achievable, they will conclude as I have already that the company could make $.25+ next year and sell at $7.00 or more. The stock will then be firm at this level. If there are no such investors or conviction around then the stock will likely fluctuate between $2 and 3, blown be the winds of small speculators, as Mr. Olivier suggested. |
