Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: Gary Smith who wrote (12656)	4/17/1998 5:17:00 PM
From: Leroyt	Read Replies (1) \| Respond to of 27968

JR and Gary, I am simply trying to determine a MINIMUM base price for shares we own excluding the merger and ANY additional earnings is 1998. First of all, I think a reasonble EPS multiple is 25. Second, EPS for 1997 was 0.11 (almost). The total shares NOW is 46 million so the back-calculated EPS for 1997 is over 0.05. That leaves a share price of 0.05 x 25 = $1.25. That should be the MINIMUM price for FAMH today (if you trust the management) and I, for one, trust Ira. Now, please remember, this number is VERY CONSERVATIVE. It uses 1998 outstanding shares but 1997 earnings. It doesn't include all the additional earnings that have come from the additional shares. PLEASE NOTE: I could easily talk about the value of the company based upon 1998 earnings but they are cause for speculation. Pre-merger I think the MINIMUM price should be $1.25 of FAMH as it is! Including recent acquisitions, the share price should probably be closer to $5.00!! JMHO Let's talk about DILUTION for a moment. If new shares are added to the company and the new shares result in a higher AVERAGE earnings per share then this is NOT dilution. It is GROWING THE COMPANY and making us ALL richer in the process. Dilution is the simple adding of shares that result in reduced earnings per share. I DO NOT think that this is what Ira and Arif have been doing with the additional shares!! Finally, the share price next week could approach or exceed the value of ATXI. How about $1.50 for FAMH and $1.00 for ATXI. Then the exchange would be 2:3 instead of the earlier announced 4:1. My understanding from the CC was the exchange rate would be determined by the price of the stock at the time of the merger. Hope ALL is fair in FAMH-land.