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Gold/Mining/Energy : Westrend Natural Gas - I.D.E. Hot Stock
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To: Leigh McBain who wrote (1535)7/24/1998 10:38:00 PM
From: Wink  Read Replies (3) of 2011
 
Leigh, I followed you right up to your last post.

Your $7.35 figure based on 32M shares I followed. But I don't see how this relates to making $36.75M in net income.

Are you saying 5M shares in addition to the 32M (37M total) or 5M total as a new organization?

If 37M shares, then WRN has 435k/37M or a 1.18% stake, which seems very small. Do you know what historical earnings or sales are? Based on your former analysis this would bump the $7.35/share figure to $8.51/share or $315M in net income. Definitely not doable unless they do a billion dollars in sales.

If 5M shares, then WRN has 435k/5M or a 8.7% stake, which seems much better. Again, based on your former analysis this would decrease the $7.35/share figure to $1.15/share or $5.7M in net income. A very realistic target.

I can't believe that Mark would sell off his best asset (Taylor) for 1.18% of SkyTex, but maybe for 8.7%. It seems that if Taylor got a board seat, then so will Mark. And, I suspect you need more than 1% of a company to get on the board!

As for the materiality of this venture...If they have been negotiating for a number of months (i.e. while the year end audit was being completed) then I believe it would hold up the audit, and hence they wouldn't want to release a q1 balance sheet until the year end audit was completed. I could be totally wrong here, and will ask my Manager of Accounting who used to be an auditor with Coopers and Lybrand. Lets all hope for good things ahead! ;>)
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