Just for fun. I am going to try to take David's math a little farther. I am doing this on the fly and am trying to be very conservative. I am also only going to assume the only business TSIG is in is CCI.
I am going to assume the business model and sales staff will allow CCI to close enough business to place 1/4 million MusicCards in the hands of the decision making public each month starting in January.
Assumptions:
MusicCard at 9.99
Deal discount 50% or initial card purchase at 5.00 to CCI
That is $1,250,000 revenue to CCI in initial revenue each month.
The first average reload will happen more quickly than future reloads from the same customer in that they will tend to take advantage of completing their library. Lets say 2 CDs/mo -- reload one year with 50% doing so.
125,000 reloading at 9.99 is still $1,250,000/mo revenue plus the initial volume one year out. Earnings growth.
CD sales in the first year using the reload figures would be 12,500,000 at about one dollar to CCI is $12,500,000 next year.
That looks like $27,500,000 earnings to CCI in 1999.
I have not taken into 2nd and further reloads.
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This does not take into consideration the corporate PromoCard purchases which are given to the public as promotional items. I am again going to assume this starts in January. The public then considers whether to activate the card and purchase their 5 CDs. Add to the list possibly 5% activation of say an average purchase of one million cards per month by the corporation.
That is 50,000 x 5 = 250,000 CDs purchased by each corporate deal with PromoCards. Now give the reload factor of the PromoCard to the MusicCard at 20%. That is another 10,000 MusicCard sales at 9.99.
Assuming the PromoCard costs one dollar, we have additional income possibilities of: 1,000,000 PromoCard
250,000 CDs
1,000,000 MusicCard(Probably in 3rd mo)
This generates a total of 2,250,000/MO or another 25,000,000/yr.
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Using 60,000,000 shares outstanding (overstated purposely) and a BB PE of 15, what share price do you get. Now apply a valuation based upon the earnings potential of all divisions and place TSIG on the NASDAQ. Give it an internet PE valuation. Also start to work in international sales.
Do you begin to see the reasoning behind the projections of the stock price forcasts given TSIG as it matures? Keep these figures or their more accurate adjustments in mind as the deals begin to be announced.
These are only my conservative guesses and any adjustments are welcome. I have tried to be conservative enough to stay out of the category of hypster. I guess it can be understood why the longs are firmly entrenched and have dificulty understanding lack of patience as TSIG finishes developing.
What Marty says
Bob
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