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Technology Stocks : SAP A.G. -- Ignore unavailable to you. Want to Upgrade?

To: richard Moss who wrote (855)	5/7/1998 8:03:00 AM
From: Birdman	Read Replies (1) \| Respond to of 3424

The "theoretical" value of the ADR is derived from the underlying price of SAP3 in Germany.It is a "claim check" against 1/12th of a share of SAP3(after the split). This much is true.In the absence of an auction market--remember that the OTC is NOT an auction market, and in the absence of high demand, the valuation should be near the theoretical value. And if these were reasonable times where normal valuations dictated stock prices, then you would be basically correct in your conclusion. But, do I have to tell you that all valuation methods have been negated by this market. Everything appears overvalued. When the market gets "frothy", even the "bustted" stocks are bid up. In the case of SAP, however, this is a company rich in fundamentals. with growth rates of 60+%/yr.. this is not a "story" stock or an IPO. It has been characterized as the "new Microsoft". It is now going to spit 4:1 and be widely available to everyone on the NYSE on August 3rd. This market has a voracious appetite as evidenced by the high tech/internet issues. They have all been bid up into the stratosphere. I believe that the dynamics of the market will again invalidate theoretical methods of valuation. If you have any other questions, we can talk off-thread...