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Technology Stocks : Advanced Engine Technologies (AENG) -- Ignore unavailable to you. Want to Upgrade?

To: john griffin who wrote (597)	6/9/1998 5:30:00 PM
From: RAY BARBER	Read Replies (2) \| Respond to of 3383

I don't really care about the supposed short sellers that seem to stay on this thread 95% of the time. I, like you, would prefer to use this forum to learn something and get some ideas about the viability of this product. As I've stated before, at least I've seen a real live demonstration of the engine. Now to your question of how much revenue stream this engine might produce if it turns out to be a breakthrough in technology. As I stated earlier, the proposed licensing fee is $20,000,000.00 per manufacturer. Lets suppose that only two of the big three auto makers were interested in licensing the engine. The first year would probably bring in only $40,000,000.00 at the license fee I heard proposed. It would take the auto companies or anyone else a period of time to perfect the design and run endurance tests. It appears to me that even if there were no engines manufactured the engine company would show a tidy profit of at least $38,000,000.00. That is figuring an overhead of 5% which ought to be in the ballpark since the company has only a President (Murray) and one board member, and pays no salary to either. It looks to me as if their expense should be minimal. That would leave earnings at a little over $1.84 per share if there are 20,600,000 shares as I have been told. Of course if there were no other licenses granted the next year and no engines built, the earnings would be zero, and the small expense would continue. Now to the math if engines are produced. I have not been able to come up with total autos produced in the U.S. as yet but I did find that Ford built 6.65 million cars and trucks in 1996. If GM is larger and Chrysler smaller, one might assume that the market might be larger than ten million. Lets use ten million anyway and use the royalty fees I heard in L.A. If we look at a 20% market share and the Royalty Fee = $100.00 per engine for 2,000,000 engines, royalty income would equal two hundred million dollars, or almost $10.00 per share. We came up with the same number in slightly different ways. Just think of the profit potential if we had 100% of the auto market. What I really believe will happen with this engine is that some company will step forward and pay the $20,000,000.00 licensing fee, develop the engine and allow the engine company to raise the fees once the engine is proven. As someone else has said, it is not an overnight project or investment. There have been many inventions that were thought to have great promise that never delivered, but there have also been some that completely revolutionized their particular field. We'll have to see which category this one falls into. For those folks that are tired of the negatives, just don't answer a negative posting, and pretty soon there won't be any more.