ANALYSIS FROM THE AOL THREAD:
Subject: Current Valuation
Date: 4/22/99 9:54 PM Pacific Daylight Time
From: HENDRASN
Message-id:
Alright guys, we have a winner here alright, I have read all the posts on the message
boards from SI to Raging Bulls, but none of them have any idea when to sell. The
problem is no one knows because no one knows what kind of revenues will be
generated from the partnership with Lucent and IBM, and its potential!! But one thing is
for sure it is big alright!! I spoke with Wendy through e-mail and she told me she can't
give specific numbers regarding the deal with Lucent but this is what I estimated...from
the analysis by Renwick Corporate Finance, it is estimated that it will generate earnings
$.03 per share on $10 million revenue in year 2000 because of Lanier shipments, and
its estimate is $.30-$.35 cents range which is 10 times earnings....look at the industry's
current P/E ratio Market Guide -
Comparison Report for e.Digital Corporation (EDIG) it is nearly 50 times earnings, which
should make it at least $1.50 cents stock right now!!
Now if you would like to value it using the revenue generated, this is a little bit more
complicated but I will explain it...to be as conservative as possible, I would used EDIG's
current fully diluted shares outstanding, which is 116.1 mil, and thus at its current price
of 70 cents a share, it amounts to 81.27 mil in mkt capitalization, divide it by its
estimated revenue of 10 mil, it Price/Sales is currently 8.1, what???? this is incredible
what
about the speculated revenue generated by the current deals with LU and IBM which I
speculate may be around $15 mil to be conservative....projected revenue will increase to
$25 mil dollars, thus its Price/Sales is currently....guess what?? You do the math $81.27
mil / $ 25 mil =3.25....oh oh?? Something is definitely wrong here...with its future
potential, shouldn't it be at least valued among its industry with deals with big names
and patented
technologies....guess what is the P/S for the industry sector....12.72!!!! And that is just
the average, this stock definitely should go higher?? Let's see now if this were to be
priced with the industry, it should be like around $2.70 cents a share, with the Lanier,
and the speculated $15 mil rev generated by LU and IBM deals, and guess what?? This
is a very very conservative prediction, even with all its preferred shares, warrants and
options
exercised, the price should be valued at this price.....you do the math, I would predict the
high end worth of this stock should $4.00, which should make it a $2.70 - $ 5.00 stock
right now!!! What is it currently trading at...that's right buddy...70 cents a share?? What
does CNBC talk about nowadays...investing in value companies..so is this a value
company or what?? I'm sorry
market makers for disclosing the true value of the company to the public but I am holding
a significant amount of shares in this company, and I do know what it's worth, rather
than see it being played by you guys at the 70 cents range...hmmmm...what do you guys
think?? Since I am not able to post this analysis on the SI Board or the Raging Bulls
board, I would appreciate it if someone would post it for me, so that the general public
will not be
fooled by the MM plays, and go long for this company...it has a tremendous future, and
it is really really undervalued for an internet stock!!! Many millionaires will be made from
this stock, good luck!!!
HendraSN |
