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Technology Stocks : Zitel-ZITL What's Happening -- Ignore unavailable to you. Want to Upgrade?

To: Deep Digm who wrote (13785)	1/21/1998 12:46:00 PM
From: CalculatedRisk	Read Replies (2) \| Respond to of 18263

Deep, glad you're feeling "frisky"! Sincerely, I have enjoyed the banter<G> For the serious investor, it is a positive for MD to receive another contract. This now makes three: 1) Nevada, 2) NOC/AMC & 3) IntraComp/Kentucky Utilities. We should expect another announcement next week about the completion of NOC/AMC and any follow on contracts. But, what is positive for a Company is not necessarily positive for the stock. The short argument has ALWAYS been based on valuation - so lets take another look: 1) ZITL Price 11.5. The non-MD business is almost worthless, but lets give it a value of $2 per share. This leaves $9.50 per share attributable to MD. 2) 17 Million shares. This includes about 1.5M shares for the debenture dilution. 3) Zitel owns approximately 33% of MD. So: $9.50 X 17 M Shares / 0.33 = $484 Million valuation for MatriDigm. And lets not forget MD's debt ... looks like about $12M. So the total valuation of MD is $496 Million. MD is primarily a Y2K company, therefore they need to generate most of this $0.5 Billion in FCF in the next 23 months. Very unlikely. Regards, Bill