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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: Scrapps who wrote (6807)	7/26/1999 2:24:00 PM
From: Elroy	Read Replies (2) \| Respond to of 9236

Royalties in the 2nd qtr. were $781,000, which were the most per qtr. royalties for AWRE to date. My take is the DSL market is in full swing and we should see very good earnings for AWRE in the upcoming qtrs. I agree completely. I think AWRE's financial results should definitely improve going forward. My only beef is with the current stock price. Royalty revenues are the company's future, because that business is like the software business (100% gross margin, and has the potential to grow exponentially). The contract revenues are basically an engineering consulting service business, and is never going to explode like royalties, and the product business is probably a good one, but again most hardware businesses don't grow 300% year over year for 3-4 years. That leaves royalties as the explanation for the sky high stock price. When do royalties explode so that you can convince yourself that the company is worth more than $1 billion? Are royalties going to go $3 million (99), $12 million (00), $40 million (01), $100 million (02), $200 million (03)? That seems ridiculously aggressive, but maybe I'm wrong? Do people actually expect AWRE at some year in the future to generate greater than $50 million in royalty revenues? If so, any idea how far in the future that year is? With royalties only going up 50% from last quarter to this quarter, it makes it very tough to say AWRE is ever going to collect $1 billion in royalty revenue, and if they're not going to collect $1 billion in royalty revenue over the next 10-15 years, how can the company be worth $1 billion?