...some fun with numbers....
Based on the quote from the article DocStone found "we're on
track to do 18 million this year":
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Estimated Digital River revenues per quarter for calendar 1998:
Q1 $3,000,000
Q2 3,850,000
Q3 4,900,000
Q4 6,250,000
Total $18,000,000
(works out to a sequential quarterly growth rate of 27-28%)
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Taking the Q4 sales estimate and plugging it into the model
I have been using in prior posts:
First section is Digital River only:
Est. Quarterly
Data Dec 98
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Sales $6,250,000
** Shares out (est) 20,869,565
Sales/Share $.2995
Sales/Share*4 $1.20 (annualizing quarterly sales)
Est value per Digital River Share @ X times annual Sales:
X = 5 $6.00
X = 10 $12.00
X = 25 $30.00
Total Digital River Mkt
Cap at Price-to-sales =
X = 5 $125,217,390
X = 10 $250,434,780
X = 25 $626,086,950
(based on 20,869,565 shares outstanding)
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Following section is TSQD....
Value of TSQD holdings of Digital River
@ 23% of Digital River market cap:
X = 5 $28,800,000
X = 10 $57,600,000
X = 25 $144,000,000
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Value Per TSQD Share @
10,981,513 shares outstanding:
X = 5 $2.62
X = 10 $5.25
X = 25 $13.11
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Notes:
1. ** Backed into outstanding Digital River shares
based on TSQD option of 4,800,000 shares representing
23% of Digital River outstanding stock.
2. Digital River quarterly sales estimate at March 98 of $3 million
based on comment in Minneapolis Business Journal article
indicating sales are running just under $1 million per month.
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Conclusion: I vote for an IPO at $20.00 per Digital River share
in time for Thanksgiving, 1998. (that would indicate a value per
TSQD share of $8.74)
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Comments?
Brian |
