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Non-Tech : Amati investors

AMTX 1.510

-6.8%

Dec 5 3:59 PM EST

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To: j rector who wrote (8569)	1/17/1997 1:35:00 AM
From: cape radical	of 31386

ok, let's try to place a value on the ADSL modem market. remember this is real rough but we need to consider numbers, not prayers. let's assume that in 1999 200m of revenue is generated. as high risk investors, we expect a return of 20%. these are industry figures: 1. revenues remain flat: PV(rev) =200/.2/1.2/1.2 =700m this is lower bound. 2. revenues increase by 15% annually after 1999 gives us circa: PV(revenue)= 200*1.15/.05/1.2/1.2 =3200m. i am not sure what the price/revenue for PAIR is, but that figure might give us a good target. i would guess around 10 but let's say that we really don't want to pay anymore than 5 because margins will be tight with all of the competitors (and they are climbing on board). this leaves us with a market capitalization of 3500m to 16000m for this sector. i agree that there is potential! the questions remain. is it easy to get around AMTX's patents? if the industry is this potentially attractive, will the big boys be looking to buy out the small players? who really has the best products and the best management? without knowing any better, i give the edge to WSTL. what is the industry willing to pay for AMTX's patents?

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