Hello, TSQD thread. I got interested last week after reading about
the Cendant deal. I have great respect for Cendant management.
Lotus/IBM, Symantec, USA Today...heavy hitters, all. I had to suspend
my skepticism a bit, but I started buying TSQD today after looking
over the potemtial....
I hope the following spreadsheet is readable...open your window all
the way up....the idea was to try and trickle down the value of the
Digital River stock to the TSQD shares, at various assumptions about
the level the market will use to value Digital River.
I am using price-to-sales ratio to value Digital River, and slapped
an assumption of $1,400,000 in sales for the December '97 quarter
into the model. Up 105% sequentially. It's Christmas, you know. I
have no idea what is realistic to expect...
The good news is no sales from the USAToday site are in any of these
numbers, actual or estimated. That deal wasn't announced until after
12/31/97.
Feedback, pro and con, is welcome. One caveat....the quarterly
numbers came from the 10-Q's. The numbers for Dec '96 came from the
10-K and I had to calculate them by backing out the prior '96
quarterly data from the annual data. They look a little funny. They
don't materially affect the attempt to value TSQD holdings of Digital
River. If anyone has better numbers for the Dec '96 quarter, please
post them, and I'll fix the spreadsheet.
Brian
===================================================================
****** DIGITAL RIVER -- SELECTED QUARTERLY DATA *****
Actual Actual
Jun-96 Mar-96
Sales (000) $0 $0
Op expenses (000) $85 $44
Net (Loss) (000) ($79) ($40)
Shares out(est)(000) 1,000 1,000
EPS (loss) ($0.08) ($0.04)
Sales/Share $0.00 $0.00
Sales/Share*4 $0.00 $0.00
====================================================================
Actual Actual Actual
Mar-97 % chg Dec-96 % chg Sep-96 % chg
Sales (000) $179 121% $81 170% $30 N/A
Op expenses (000) $683 $362 $222
Net (Loss) (000) ($492) ($368) ($203)
Shares out (est)(000) 1,345 1,345 1,000
EPS (loss) ($0.37) ($0.27) ($0.20)
Sales/Share $0.13 $0.06 $0.03
Sales/Share*4 $0.53 $0.24 $0.12
====================================================================
Est. Actual Actual
Dec-97 % chg Sep-97 % chg Jun-97 % chg
Sales (000) $1,400 105% $682 142% $282 58%
Op expenses (000) N/A $1,545 $978
Net (Loss) (000) N/A ($842) ($684)
Shares out (est) (000) 1,345 1,345 1,345
EPS (loss) N/A ($0.63) ($0.51)
Sales/Share $1.04 $0.51 $0.21
Sales/Share*4 $4.16 $2.03 $0.84
Value/Share @ X times Sales:
X = 5 $20.82 $10.14
X = 10 $41.64 $20.28
X = 25 $104.09 $50.71
Total Digital River Mkt
Cap (000) at Price-to-sales =
X = 5 $28,000 $13,640
X = 10 $56,000 $27,280
X = 25 $140,000 $68,200
TSQD Holdings Value @ 37%
of Total
X = 5 $10,360 $5,047
X = 10 $20,720 $10,094
X = 25 $51,800 $25,234
Value Per TSQD Share
@ 10,374,870 shares
outstanding:
X = 5 $1.00 $0.49
X = 10 $2.00 $0.97
X = 25 $4.99 $2.43
Note: Price to sales ratio for some web e-commerce companies at 1/98:
E*Trade EGRP 5.3
Amazon AMZN 9.4
N2K NTKI 26.1 |
