FFNEODOC, Thanks for the post. Please, be careful with XNET earnings..
I don't know where you get those earnings from on XNET. Please, read this post carefully, as it is the latest guesstimate on XNET earnings and I am waiting on corrections from Mr Cheung, as I believe he is not altogether comfortable with it. Remember, these figures are estimates going forward into 1999, from January 99, as the base for calculations. They do not apply to 1998 at all, since 1998 would be substantially lower.
All the same, this is IMHO a great Company....
Regards, F. Goelo + + +
To: Jeffrey L. Henken (769 )
From: Francois Goelo Tuesday, Mar 16 1999 9:37AM ET
Reply # of 883
Jeff, EXPLANATION OF XNET EARNINGS FROM ITS INVESTOR'S PACKAGE.
It has been said that my discussion on XNET earnings in previous posts involved non public information. Nothing is further from the truth: I called Mr Cheung at 604-689 4407, who sent me an investor's package which contained a brochure and graph of users of XNET services. I assumed these documents were publicly available and used them as follows:
1) From the graph: in January 1999, there were approximately 11,000 e-mail users and 7000 dial-up users, which respectively brought in average yearly revenue (from brochure) of $24.00 and $150. The calculation is thus:
11,000 x 24 = 264,0000
7000 x 150 = 1,050,000
Total forward anticipated yearly revenue (1999), based on the month of January 99 is: 264,000 + 1,050,000 = $1,314,000
2) The brochure mentioned 50% operating margins, but further research in the documents supplied, actually shows that operating income, net of expenses is, in round figures: 33%
Net revenue then would be: 1,314,000 x 33% = $433,620.00
Since revenue from other sources, such as ISP, internet operation , e-commerce is not quantified, I rounded that to $450,000.00, or $37,500 per month, which seems a reasonable net earning assumption, based on one month only of January 1999, going forward into the 1999 year. Obviously, this is an estimate only and the actual figures could be substantially lower or higher.
3)Why did the XNET share go up so substantially? Because, it used to be at 40/45 cents, and 14.2 Millions shares would give it a capitalization of less than $6 Millions, which seems kind of ludicrous for a profitable Company with great potential in an expanding market.
4) I assumed that the outstanding shares of 14.2 Millions are public knowledge. The float appears to be somewhere between 2 and 5 Millions.
Disclaimer: this figures may be totally wrong and I have sent a copy to Mr Cheung to correct any mistake. I am not an accountant and cannot be held responsible for any discrepancy, as I am doing this as a service to the investing community for which I have not been rewarded. It is my opinion only, so do not use any of this information for investment purposes and do your own Due Diligence.
I am long 30,000 shares in XNET.
Regards, F. Goelo + + +
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