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Non-Tech : Am.United Global, Inc. (AUGI)
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To: jtechkid who wrote (1941)5/10/1998 1:18:00 AM
From: Michael Paul Langley  Read Replies (1) of 2065
 
A combination of factors, including the material and adverse developments affecting the NTERPRISE software, substantial operating losses and depletion of the Company's cash reserves as well as delays in effecting significant commercial sales of Connectsoft's FREEAGENT technology have also prompted the Company's Board of Directors to effect a strategic decision to sell the Connectsoft and the remaining balance of the Company's Computer Software Businesses. [from page 57]

Interglobe, Connectsft, Exodus to be sold probably for book value or maybe even less. What is left of AUGI's holdings after those entities are sold off are WPEC and IDF (nearly all of the price increase IMO was because of exodus and its potential similar valuation against citrix systems.

Before AUGI's acquisition binge their were approx 5.5 million shares at company was around $3-4 a share for a market capitalization of $20 mil or so. Now there is 18,358,539 share (fully diluted includes some mgt options that may be cancelled)before the 5.75 million additional shares that will be eventually converted in this recent private placement.

So I figure at least 20 million shares outstanding (market cap of 40 million currently)when all is said and done and AUGI has only added Techstar/IDF into the mix of their holdings. Admittedly, almost assuredly AUGI will be able to generate positive earning with these two entities ($2-5 million net is probably possible)although WPEC earnings have proved to be both cyclical and seasonal to some extent.

Additionally, AUGI will not achieve a high PE with this mix of businesses (15-20 PE max I would guess). Therefore, Augi may be able to generate about $.10-.25 per share it its first fiscal year after all the other holdings are sold. Even given a PE of20 the high end of valuation only achieves a price of maybe $5.00 per share.

Jtechkid, what are you basing your short-term valuation of AUGI on (Other than the Mgt took Gasi up 700% and are miracle workers who will do the same for AUGI in record time).

P.S. I have no current position in AUGI long or short just looking for inciteful conversation and info that can be used to value AUGI in its current state.
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