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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: JimC1997 who wrote (7805)	9/22/1999 9:28:00 AM
From: sdr	Read Replies (1) \| Respond to of 18366

JimC - I believe your very conservative goals can be achieved - but if the investors imagination takes over as it has with other companies that produce new technologies for the internet related business - text to voice / voice to text etc. the share price can be very exciting - also don't believe early on there will be EPS has most of the gross profits will go to R+D leaving little if any net profit - the share price will increase on contract announcements and gross revenue numbers - do not believe EDIG can analyzed as a seasoned company is analyzed - anyway you look at I think EDIGers will be happy campers IMO

To: JimC1997 who wrote (7805)	9/22/1999 11:19:00 AM
From: sdr	Respond to of 18366

from RB By: Tinroad Reply To: NoneWednesday, 22 Sep 1999 at 7:35 AM EDT Post # of 76295 JimC and drven on valuation of EDIG: Drven: (http://www.ragingbull.com/mboard/boards.cgi?board=EDIG&read=76179 ) Jim; I read your analysis with interest. Yet, I sincerely see it as the lower bound of the possible price bracket. It seems to me, without disputing your assumptions concerning rates of growth, that what is missing in the picture you painted is the synergy and the conceivable economies of scale that will result from the growth of revenues and profits you postulated. By economies to scale I do not mean only those that refer to large production. I also mean those that will result from the technological change itself that will be taking place. In other words, technology now will not be the product of a bright idea but rather the result of the endogenous-synergic dynamic that the larger number of scientists can generate. Again, currently the company employs 23 people not all of whom are engineers. With the contracts at hand as well as the prospects, they cannot afford to spend any time in extensions of their technology, given the limited amount of resources they currently have available. For example, the Lanier product can be leveraged in so many directions. Therefore, my thoughts are that as money will start coming in, Edig will start hiring in order to expand and extend their product lines as well as cut the delivery time. This has short and long run implications. Further, I do not share your views concerning the zero evaluation of growth by the market and I also have problems with the discount rate and the fact that Intel does not count at all. The discount rate you used might be appropriate for Fund managers but it is way too high for the public at large. I, like you , have no idea as to the importance of the INTEL contract. But, unlike you ,I wouldn't impute a zero value. Given how the market responds to expectations, my evaluation for the next twelve months exceeds yours by at least $20.00. Therefore, In MHO, I estimate a price in the range of $40 initially retreating to $18-20 but not for too long. I will call this the upper bound. I'm sure, the truth will be somewhere in between. finally, I want to thank for, as usual, an excellent post. ------------------------------------------------------------------------ ------------------------------------------------------------------------