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Microcap & Penny Stocks : DGIV-A-HOLICS...FAMILY CHIT CHAT ONLY!! -- Ignore unavailable to you. Want to Upgrade?

To: drivaldog who wrote (25730)	9/13/1998 9:46:00 AM
From: RocketMan	Read Replies (1) \| Respond to of 50264

My assumption is that is 110 million minutes per year. Mark Barger posted an interesting conversation he had with Cheryl Mitchell (Coporate Communications of Digitcom) that clarifies some of this, although she was giving her impression and had to check. Her impression was that "DGIV would get revenues on 100% of the long distance minutes mentioned on today's press release, but will check to verify. She exchanged e-mails with JC last night. Her impression on this deal is that DGIV gets it's revenues from this deal by sharing the cost savings with Egypt Telecom Partners from using IP LD instead of "standard" LD. DGIV is negotiating to get between 30%-50% of the cost savings of using IP tech. to reduce ETP's cost of long distance service. Using DGIV's technology they project reducing their cost from .60/min. to around .08/min. If DGIV were to get 35% of these cost savings, that amounts to .18/min for DGIV." As Mark said, if DGIV gets .18 per minute, .18/min times 110 mil. min. per year is $19.8 mil. per year. If the split is at the high side, 50% of the savings, that is .26 per minute to DGIV, times 110M minutes, that makes it $28.6M per year. So, I think we can bound this contract as being worth somewhere between 20 and 30 M$ per year in revenues. With roughly 20M shares outstanding, that makes this worth between $1 and $1.50 per share in revenues, and at a 4 to 1 price to revenues ratio, that makes the potential value of this contract equivalent to a $4 to $5.50 stock price based on this one contract alone. I think this is conservative, since DGIV's costs have to be much less than industry average, so that the the true price to revenues ratio should be more like 6 to 1, but without knowing more let's just keep it conservative. Now, if DGIV has similar contract terms with 4 or 5 other countries, the price gets up to what is comparable with other VoIP companies like IDTC. So why is the price nowhere near those levels? * OTC-BB, Non-Reporting company; * no analyst coverage yet; * the overall market swoon; * day trading; * MMs walking the price down on 500 share trades and not bringing it up on 5000 share trades. All of these are temporary, and except for the overall market, should be corrected starting once financials and the SB10 are out. However, we will need full listing before it all goes away, IMO. I would caution that I am NOT a financial type, and so I welcome discussion on these estimates, especially from those who do have a financial background. If I am missing something, let me know.