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Technology Stocks : IATV-ACTV Digital Convergence Software-HyperTV
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To: Roger Schelling who wrote (3722)5/17/1999 2:09:00 PM
From: StaggerLee  Read Replies (2) of 13157
 
The latest Bridge report neglects to factor in the fully reserved deferred tax asset in its valuation model. ACTV has about $20 million of NOL's and is projected to generate another $20 million in losses in 1999 and 2000 (per Bridge). Presuming these NOL's (which have been expensed) can be recovered, then Bridge should show substantially higher income (I think?). Excluding tax expense in 2003, the Bridge model suggests a current valuation of $58.07 to $59.96, based my my gyrations.

But then again, the Bridge report also appears to neglect Samuel's appreciation bonus, which would be about $.80 a share over the period being evaluated, or about $.16/year EPS. That knocks about $3 off their valuation projection at a P/E of 20. Then there's the employee SAR plan (896,000 shares @$40/share appreciation equals $38 million of expense to the P&L, or about $1.09/share over the 5 years; say $.27/share against our EPS per year). At 20 times earnings, that's another $5.40 off the share price projection.

Fun with numbers. So it looks like their model gives a price target between $15 and about $52. I sure wish Bridge would explain the numbers rather than simply spamming these boards with their hype and then disappearing.

For what it's worth, I kind of like the way the Bridge model is laid out. Now, it's just a question of which assumptions to use.
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