Rebutting the rebuttle!
Mike,
Thanks for responding with your thoughts.
First, I would not agree that a fair value for a bb investment banker type stock is a pe of 20. But let's go ahead and use that for arguments sake. The first deal (of maybe 6 for the year according to company) was $250,000 and the second was $400,000. But the second has pretty much stalled, by admission of the company, since it wasn't quite prepared to go public. So I can scratch that one for now. The first and third then bring in $125,000 and $300,000 in earnings. This would be $0.0045/share. Multiply that by your estimate of 20 and we get a "fair" value of around $0.09. Using this as an average for 2 deals, then multiply that by 3 to get the 6 deals per year. That gives a value of $0.27 - within the range of $0.20 and $0.30 that I mentioned.
That is not a bad price from this viewpoint($0.046), but well below the target of $1.00 that the company has basically set with the warrants that were given out in the exchange. This also assumes that all goes well and that they can speed up the process. It has been around 6 months since the change in direction and first announcements were made. So we may not get the full 6, at least this year.
On the positive side, this does not take into account BIO, so that could add to the earnings (or could subtract if like other bio companies). The other biggest positive that could really change the picture is the reduction of the float. Retiring the 50 mill would automatically more than double all of the above figures and at least bring us within range of that $1.00 price. This last statement is the main point as I see it.
Complaints have been made on this thread many times about hyping this stock. The way to get away from the hype is to run scenarios by each other as to the true value and direction of the company. This is the way to gain respect with all of those "lurkers" and people that are looking to buy in. We need to continue to have discussions that are based on the bottom line - what does this do for shareholders.
James - I would disagree that IBM having more stock proves a point. The only way we can judge and evaluate any stocks relative to each other is to look at the basic financial ratios. IBM may have 1 billion shares, but they also make $6.01/share and have a pe of 17. We have to look at Eutro's profits in relation to the shares in order to get some idea of the fair value.
As usual, these are only my opinions and the numbers are based on estimates I have come up with. Since the company is not reporting yet, this is the only way I know of having these types of discussions and have them mean anything.
Any further ideas/responses are welcome.
Doug |
