Ken, for the sake of argument, let's say David Stewart is right, and Zitel starts making big bucks in the 2nd half of 1997, and really hit it big in 1998 ... but do you seriously think any company in its right mind will start their Y2K project in 1999. So here you have a company that will have a spike in revenue for a year and a half, then show a substantial decline, what kind of multiple do you give it, 100X earnings, 50X, 20X ...
So what kind of numbers does David Stewart say $100M, $200M, $300M ...
We've just had a year 2000 assessment done in the place where I work, one of the biggest chemical companies in the world ... 2 vendors made bids, the winning bid was for $10M which include conversion, testing, implementation ... since conversion is a small part of the cost ... a big company like ours will probably spend $2 million for the conversion portion of the project ... so if Zitel had the product ready today, they would have to come below $2M to have a chance ...
Now we're getting into number, if the average sale of Zitel's software is $1 M, it will need 70 customers to make $70 M ... 10% of that is $7M which translates to $1 per share ...
Do you see Zitel getting 70 customers, or is it more like 7?
As you can see, when you support your arguments with numbers ... it's not hype |
