This industry is very young and at this point there are not very many publicly traded companies in this field. The big names of course are DirecTv which is owned by Hughes and Echostar which trades under the symbol DISH. There are several companies that are expected to go public in the near future such as Golden Sky Partners.
The big brokerage firms however are really starting to notice the growth in the satellite tv industry and have come out with some very encouraging analysis of some of the public companies. DISH for example is highly recommended by DLJ and Merrill Lynch. In November you could have bought DISH for around $25. Today it trades around $95.
MDTV is in a special niche as it bares none of the huge infrastructure costs associated with satellite communications. There are only a very small number of companies in the MDU field.
Bear Stearns recently came out with a buy recommendation on a similar company, PGTV. Bear Stearns valued each PGTV subscriber at $2086 each (moving to $2400 in year 2000). PGTV happens to be the top rated company (out of 45 companies)in the broadcast/tv industry ranking biz.yahoo.com
Most of PGTV growth has come thru acquisitions, in some cases paying well over $2000 per subscriber in certain deals. They currently have over 500,000 subscribers and operate their satellite services mostly in rural areas where it is predominantly single family homes. It would also be more difficult for PGTV to offer some of the services that MDTV will be offering in the near future such as high speed internet, security monitoring, telephony, etc.
MDTV actually has a better business model than PGTV. The Bear Stearns valuation of $2,000 per subscriber is related only to digital satellite tv whereas there should be some value attached to the potential high speed internet subscribers etc therefore making a MDU subscriber even more valuable.
MDTV has just under 11,000 subscribers, value $22 million ($2.17 per share). Backlog of potential subs, 25,000. Potential value $50 million. With only 9.2 million shares currently outstanding it makes for an impressive future value. Assume that the company issues additional shares to raise more equity bringing the total to 12 million shares then the future value could be
(11,000 + 25,000 = 36,000 36,000 X $2,000/sub = $72 million
$72 million / 12 million shares = $6.00 per share)
The company projects that it will have approximately 250,000 subscribers within 3 years making for a market value of $500 million at today's digital satellite tv subscriber value of $2,000 per sub. At $2400 per sub the numbers are: $600 million or $50 per share
I hope this sheds some light on the matter.
MDTV website mduc.com
MDTV News biz.yahoo.com
PGTV website pgtv.com
PGTV coverage biz.yahoo.com
Disclaimer: I currently act as investor relations consultant for the company. In no way should this be viewed as an official valuation of MDTV. |
