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Gold/Mining/Energy : Capital Alliance Group - CPT (CDNX) -- Ignore unavailable to you. Want to Upgrade?

To: keith massey who wrote (47)	3/19/2000 2:04:00 AM
From: keith massey	Respond to of 960

Thought this post from the Stockhouse thread might be of interest. When is the i.p.o.? What do you think it will open at? What do you think it will close at . What do you think the price of C P T will be after the dust settles? I believe they are planning a fall IPO (August) with the IPO money ($40 million US) being raised by June. The seed capital of $10 million US is being raised as we speak and the company said in a recent news release that they expect to announce the closing of this deal by the end of March. The rest of the questions are valid but anyone that gave you an answer would just be guessing. The IPO might go up 500% on the first or barely move at all. I don't think we will know until the IPO gets very close and even then it is anyone?s guess. If I was forced to hazard a guess I would say SEG will be well received for a few reasons. The obvious one is that SEG has a new and innovative business model that has already being discussed on this thread in some detail. However the point that has not been mention yet is that SEG is partner with leading brokers throughout Asia and is also partners with the brokerage firms underwriting SEG (ICEA and Tia Fook). It is these brokerages firms job to recommend stocks to their clients for purchase. What stock do you think they are going to recommend come SEG?s IPO date? As for the valuation of CPT just prior to the IPO, I think there might be two schools of thought on this point. In the March 13, 2000 news release CPT states that they will maintain a majority equity interest in SEG after the IPO, which means they will hold at least 51% of the SEG. Before the IPO date the company will have spun off 22% for $10 million US and around 24-27% for $40 million US. This means that 46-49% of the company is valued at $50 million US or $74 million Cdn. Simple math would say that CPT's equity stake in SEG would then be worth approximately $76 million Cdn at that time. Add to this the $5 million in cash from the recent private placements and the cash from the IPO and you come up with an asset value of around $155 million Cdn. However the other school of thought would say that the seed capital is discounted and the company should be valued based on the IPO pricing. If 26-29% of the company is worth $40 million US at IPO time then CPT?s 51% stake in the company should be worth approximately $106 million Cdn at the same time. Add to this the $5 million from the recent private placements and the $74 million from the IPO and you come up with an asset value of around $185 million Cdn. So you have an asset value of $155-$185 million depending on what approach you use just prior to the IPO date. Now use either the shares outstanding or fully diluted to come up with a fair value. I can promise you this value is significantly higher than the current price If SEG has a spectacular IPO and the stock is well received by the Asia community the above mentioned asset value will of course be significantly higher. A few things that should be mentioned about the above calculations. 1. It does not take into account the money the company spends in the next 5 months 2. It does not take into account the extra value added by their 100% owned subsidiary CIBT Best Regards KEITH