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Microcap & Penny Stocks : TMMI - Total Multimedia -- Ignore unavailable to you. Want to Upgrade?

To: Larry Panik who wrote (8247)	4/10/1998 12:03:00 PM
From: Bruce Hoyt	Read Replies (2) \| Respond to of 19109

Larry, you and JP both make good points. I think the current price is irrelevant because of, as Arnie points out, the volume is so low. When volume is so low, stocks are usually unfairly priced high or low. The true test is what they do with trading volume. But with no news, good or bad, we have limited volume. I don't expect much to happen before April 22. Then, TMM should either announce a plan to market its products or a merger/buyout/key alliance for survival. We can't work out of Mike's garage very long. I wanted to go back to Arnie's favorite question, TMM's valuation. Here's my SWAG on their rough POTENTIAL valuation for stock price or buyout purposes: * Annual revenue estimates for Elvis CD. With any marketing this should sell at least 50,000 copies a year, more with David making a few enhancements. I think former debtors get most of this money so let's use $5 a copy as TMM's share of gross revenues. That's $250k per year in revenues. * Annual revenue estimates for Trudef. If the current version includes corrections for the minor beta problems we saw, it should sell at least 30k copies a year at a guess of $15 per CD to TMM. That's $450k a year to TMM in revenues. * The new contract with RAVE, per Tom, should draw $ 2 - 3 million per year. We'll use the $ 2 million for this valuation. * Total recurring revenues = $ 2.7 million. This does not include any new products or potentially higher sales of products. Normal valuation is ~5 times annual revenues so we could estimate a $13.5 million valuation based on this formula. * Next, we need to add in the Jackson settlement. Since we will probably get assets in lieu of the $ 3.5 million cash, we should get at least $ 4-5 million in assets but I will use $ 3.5 million. * Now we add in the infamous tax loss carry forward. Information on the exact amount has been inconsistent but appears to be somewhere around $ 20 million (we were very good at losing money). Normal corporate taxes would be around 40% so a $ 20 million deduction saves you about $ 8 million. Of course if it is sold they would want a discount so we might get $ 7.5 million for it. * Per Tom, we have $ 500k+ in computer equipment and other hardware assets. So, we have $ 13.5 million + $ 3.5 million + $ 7.5 million + $ .5 million = $ 25 million. Using the estimated 100 million shares outstanding figure, that equates to a 25 cent fair value stock price or buyout target value. This does not include potential revenues from other products using the Trudef engine, other new Elvis style CDs, awards from lawsuits or settlements with Iterated, Altamira, MCI, etc. so a few more cents might be possible. All right guys, I've got my asbestos underwear on so fire away! Bruce ps: Tom, I would love your comments on this estimate.