C-Cube Message Board - Msg: 9180515

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Technology Stocks : C-Cube

CUBE 35.90

+0.2%

Dec 26 9:30 AM EST

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To: Jacques Chitte who wrote (40204)	4/27/1999 6:18:00 PM
From: Black-Scholes	Read Replies (2) of 50808

Well - it comes down to how the market would value Divicom as a going concern. I think it is fair to say that Divicom is considered a networking company and, more recently, a communications company. The market has been awarding companies in this sector PE's from 40 to 80. Half of CUBE's revenues and earnings come from Divicom or will come from Divicom once a spinoff is executed, so $1.16/2 = $.58/dil.sh. Let's for fun say a PE of 50 $.58 * 50 = $29/sh. --- just for Divicom! Take the other half of earnings and award a conservative "semiconductor" multiple of say 15 $.58 * 15 = $8.7/dil sh. $29 + $8 = $37/dil sh. !!!! if the spinoff is realized. Now obviously, what multiple the market awards Divicom as a stand-alone company is anybody's guess but you can be damn sure it will be up there with all the other networkers or maybe even higher because the digital video network market is essentially brand new and Divicom is the CLEAR leader. This valuation doesn't even take into account the $5.75/dil.sh. of cash CUBE has on their balance sheet. This ain't dreaming.

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