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Biotech / Medical : GZTC -- Ignore unavailable to you. Want to Upgrade?

To: Andrew H who wrote (569)	10/22/1998 1:14:00 PM
From: HIA	Read Replies (1) \| Respond to of 752

The maximum dilution of the preferred offering is 18.6%...that's 3.48 million shares maximum allowed for the preferred conversion...with the current share level at 18.7 million shares... ...but this is how small companies finance development...they place new shares for development capital...(Intel...for instance...just bought new shares in Micron...Intel did not buy market shares because they wanted Micron to receive the funds for new memory chip development...)...and I expect that next year Genezyme General will re-establish its percentage of ownership by buying new shares of gztc (with loans that are convertible into new shares)...so I am targeting this company at about 25 million shares...for 3 to 5 years from now... Is that okay? Yes...see most small-cap companies are under-capitalized at the IPO...as opposed to...say...internet companies that are over-capitalized at the IPO... So the bottom line is to determine whether a company is under-capitalized, fairly-capitalized, or over-capitalized...How to do that? Well...just predict the earnings at some reasonable future point in time...and calculate a P/E ratio...How does gztc stack-up? Well...it this company had a price to sales ratio of three...that would be a stock price of 8.2...But the big question...or hope...is how big is the re ATIII product going to be... On the gztc projects...I plan on going to the web site and counting the number of joint venture projects...and then the number of production agreement (sales royalties) projects...as different situations seem to call for different types of agreements...