E4L, Inc. (NYSE: ETV) Message Board

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Non-Tech : E4L, Inc. (NYSE: ETV)

ETV 13.72

-1.5%

Nov 20 4:00 PM EST

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To: ayahuasca who wrote (585)	11/29/1998 7:31:00 PM
From: shane hartman	Read Replies (1) of 1080

>The mitsui deal Now that is something to get excited about. And if the CEO tells us the terms of the deal with CD is like AOL ($50M up front against future cut of membership revenues), then you are right, NM will go up. I think the uncertainty is holding the stock back. When I sold 2000 shares the bid/ask dropped 1/4 point. That means there wasn't much buying. If the CEO does a good VCALL, there will be buying. How much can NM make from this deal if it is like AOL? Let's say that they want to sign up 2M members per year (AOL's target). Lets guess that the split on the fee is 50-50. 75 buck memberships (I think). I believe they said they will spend $100M on advertising over 3 years. Say SGA is 20% 2M X $75 X 50% + 4M X $75 X 50% + 6M X $75 X 50% = 450M - 100M = 350M - 20% = 280M operating profit over 3 years I have simplified a lot of stuff, but that's not too bad (about $8 bucks per share 3 years). That would put it's forward PE around 8. So it could easily move up 50% - 100%. And that does not count the mitsui deal or fixing infomercial growth. My problem is that I don't know if the calculation is valid until the CEO tells me what their cut is and their target for new members.

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