In looking more closely at VVTV, and in comparing content and model to TvontheWeb, there are some similarities but many differences.
VVTV is actually an on-line catalog retailer using streaming technologies. Production is sparce, to say the least; in other words, it is not a content site. Sales are about 200m/yr (and are declining), P/E is about 83.0, P/S is 1.58 and float is 16m. Market cap is 294m (about $15/sh). I'm guessing that profit is taken as a percentage of sales after expenses. IMO, barriers to entry for competitors do not seem to be there.
On the other hand, TVontheWeb has relatively advanced production capabilities, is almost the definition of a content site and per Dave Gardy, may be profitable in a relatively short period of time. Also, growth is accelerating, and the business model seems to be based on underwritten costs plus markup. Finally, the content nature of the presentation is almost one on one with the production quality and is therefore unique to the specific channel. Here, barriers to entry are driven by production facilities and skill and perhaps in time digital storage equipment gear. These channel customers would then tend to become close captive accounts.
If Ampex increases its stake in TVW to say ~50%, and TVW reaches its stride in six months and then IPO's one year later, Ampex's ballpark revenue and asset gain could be as high as $6 /sh on AXC's 50m shares: ($30/sh * 7mTVW) / (40mAXC) plus ~50% booked profit from TVW operations.
The matter of AEN-TV, Reiter and MicroNet booked revenues (100% in the case of Reiter and MicroNet) is still another matter. Also, there are strong possibilities of increased DST sales straight from Ampex.
After just assembling the current package, and factoring in TVW's IPO, I think $8 - 12/sh for Ampex one year out is as good a SWAG as any. Incidently, if you have not encountered it before, a SWAG is a W...A..G.... which is "scientific."
If there are more acquisitions, or the Reiter division attains fuller definition, or there is a major investment in Ampex, then possibly revalue upward. If anything, the buyout price of Ampex has increased along with anticipated share price.
Since Ampex is still a shadowed stock, there is little market recognition of it's current efforts. I am eagerly awaiting the 10K and the next two 10Q's going forward. I think these important "announcements" could change everything.
Ed Perry
|
