KS, I am reposting an earlier post for reference:
Peepster, You had asked me earlier if I had added all of the options listed in the recent
Form 3 filings to the outstanding shares when I came up with the 25 million shares and I
had told you that I had just estimated that number. Well, I went back and added up all
of the options in all of the recent filings, plus looked up the remaining options for CC
(1.8 million remaining as of July 22, 1998) and came up with right at 27 million shares. I
would guess that there are probably a few more out there but that this represents all of
the large positions. If we add another .5 million for misc. and recalculate we end up with
27.5 million shares so:
Current value of DCI based on 50 million run rate, (does not include Locus or TWC
JV).
On 1X revenues: $1.82
On 2X revenues: $3.64
On 2.5X revenues: $4.55
On 3X revenues: $5.45
(The target multiple is 2-3X so the $4.55/share would appear to most closely represent
what DCI could be sold for "as is", I just threw the 1X multiple in)
The other numbers I posted based on the 35 million shares after Locus and the TWC
JV has been completed remains the same:
On 35 million shares out, Locus and TWC on board:
$4.30 on 1X revenues
$8.60 on 2X revenues
$10.70 on 2.5X revenues
$12.94 on 3X revenues"
James
As I pointed out in even earlier posts as well, these are all estimates of the total number of shares that would be out at the current time with all options exercised and in the future after the Locus acquisition and the TWC JV had been finalized. These numbers could vary depending on certain conversion rates and how certain financing is done etc. The 2-3X revenue multiple is also an estimate of how much small telecoms over the 100 million revenue number can be sold for. As Joe Medsker pointed out, this multiple can be higher for certain sales, and in fact we sold the WH. Smith contracts for a whopping 5X revenues. The eventual sale of DCI is the current primary focus for shareholders as this is all a part of the original plan laid out by management and with what may end up being the final pieces being added to DCI (Locus and TWC) , the integration and subsequent sale of the company is all that remains of the original plan..hence the focus. DCI management while working towards this plan, nonetheless continues to run business as though no sale was planned. In other words continually positioning DCI as though it will exist for the long term, since there are no guarantees with respect to when the company will be sold. The extremely rapid growth in DCI revenues per share over time as derived from the past filings and current run-rates are the yardstick that I use in measuring DCI's progress, and while I don't like the price action of our stock, the underlying company has been progressing very nicely IMO.
James |
