Hummingbird Comm. (HUMC) Message Board

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Technology Stocks : Hummingbird Comm. (HUMC)

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To: Dr. J who wrote (1581)	4/29/1998 9:29:00 PM
From: Paul Loucks	Read Replies (1) of 2018

Your present value calculation is flawed. You are assuming that the company can generate 6% return indefinitely and thereby protect your principal. The point is that the cash flow generation of connectivity product will only last another five years. At that point in time, there will be no principal (products) to generate the cash flow. So, yes, you got your 6% for the five years but you lost your entire principal. Point #2 is determining the value of the company right now (owners equity + highly likely connectivity future profitability + Andyne value). Andrew, point #2 was the most important of them all. If you were to buy the entire company tomorrow for $525M, what would you own and what could you expected to get back over the next X years. Put the cash in your pocket, milk the profits (cash) from the connectivity tools and spin Andyne off as a separate company. Your point about return on the cash is not valid. We are determining the value of the company as of today. Paul

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