Rocketman,
Good questions.
You know it's funny.
People asked the exact same questions on the DGIV thread back in March 1998:
"Why did the price of DGIV fall so much in the past six months?"
DGIV had fallen from $2.50 to $.25 from October 1997 to Feb 1998.
It was hard to come up with an answer back in March to the reason why it had fallen back.
I mean in retrospect, as a DGIV shareholder, if you knew DGIV was .25 a share back then...wouldn't you have bought the whole float?
Of course you would. But that is the advantage of retrospect vision.
A lot of people thought..."well, there must be a good reason for it." and "if its too good to be true... it probably is"..and many bypassed DGIV at that time as an investment. Only as momentum started to pick up did people panic and jump aboard.
Which, really, is fine with me.
I suspect it is the same reason FTEL has declined to .90 right now.
People had loftier expectations and a quicker time frame in mind for DGIV in October 1997...and they certainly had a quicker time frame in mind for FTEL back in October 1997 for FTEL (when it hit $10.50).
And DGIV had diluted itself during the fall of 1997 (read the DGIV news releases around that time)
FTEL's recent "problems" have to do with convertible debentures- of which all should be done converting. It would have added 2-3 million shares to FTEL's approximate 20 mil OS.
So dilution seems to have contributed to FTEL's decline as well.
Rocket, I think SEC reporting has to do more with integrity of a company rather than sheer value of a company. I do not believe FTEL is worth inherently more due to its SEC reporting. But I believe it is seen in the eyes of the market as more CREDIBLE, maybe, because what you see is what you get.
I believe that FTEL is the best bargain today because it has VoIP revenues right now as the start of September 1, 1998 from Bosnia and Guatemala and the United Kingdom (England, Ireland, Scotland, Wales). In a mere 18 days, Guatemala is averaging 7000 minutes PER DAY of revs to FTEL...and that has to be with a very limited marketing effort.
Whereas DGIV will, in November, have regional IP phone service in
5 cities of Indonesia and eventually regional phone service in 3 cities in Russia.
DGIV has 19 million shares outstanding and trades at 2 1/2 times
FTEL's current price.
This is my entire point to my messages:
If you believe DGIV and FTEL have the exact same potential at this point of time and you believe that their market caps to be equal (market cap = what the market believes any company is worth):
.90 (FTEL's price) X 22 million shares = $20 million market cap
2.25 (DGIV price) X 19 million = $43 million market cap
If you believe DGIV is fairly priced at $2.25, it is my belief that FTEL is worth AT LEAST as much as DGIV's market cap of $43 million.
That means FTEL should be trading at $2.00, not .90.
If you believe FTEL is ahead of the IP telephony game because it has revenues coming in from sales of gateway boxes and revenues from VoIP minutes.
Then FTEL is worth around 2.50 - 3.00
Or in other words, I believe FTEL has the potential gain of 100 - 200%
Hence, a bargain today.
Whatever people decide... IP TELEPHONY is going to sweep this world because it is incredibly cheap and the profit margins are phenomenally large and the regualtion/taxation is relatively small.
I don't know of any other industry that has better potential than
IP Telephony.
If you do, please let me know.
-DavidCG
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