PSIX up 26.5%, Takeover(?) Message Board

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Technology Stocks : PSIX up 26.5%, Takeover(?)

PSIX 66.79

+5.7%

Jan 9 9:30 AM EST

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To: ajcmr who wrote (35)	5/19/1996 3:12:00 AM
From: Doug Lakin	of 5650

Antal et al: Prodigy went for $200 mil. With a customer base of about 1 mil, this means that Prodigy was valued at about $200/customer. I believe PSI has a customer base of 500,000. If you use customer base as a basis for valuation (as is common in the industry), then PSI is only valued at $100 mil. (Remember, equipment is a sunk cost and is not figured in the earnings valuation.) Based on 32 mil. shares outstanding, PSI's valuation based on the customer base is only $3/share. So where does the added value come from that makes PSI more valuable than Prodigy? If you figure PSI is worth $30/share, this means each customer is valued at $2,000. I will tell you right now that if someone paid me even $200 per customer to set up an ISP today, I would mortgage my house and cash my IRAs tomorrow to go into the Internet business!

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