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Technology Stocks : Ampex Corporation (AEXCA) -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (8476)	5/16/1999 7:29:00 PM
From: Carl R.	Respond to of 17679

Zeev, if you look at another way you don't need nearly the PSR to justify the current price as you do to justify the price of $7. I think the stock was a bit ahead of itself at $7, but will get there again as AXC's internet sales explode. Using a value of $125m for royalties, data systems, and Micronet (by the way, what do think of this valuation?), and Q198 internet sales of $1.8million and an AXC share of 51%, let's do a comparison of AXC with some of the other companies in the area of internet TV: Sales Mkt Growth ovr Annualized Profit Q199 Cap Q198 PSR Q199 RNWK $23.5 $5900 88% 63 (.7) BCST 10.3 4300 127% 104 (3.8) IATV .4 560 11% 350 (7.4) VDAT 1.1 184 943% 42 (1.1) AXC's share .9 145 300% 40 ??? I think that the valuation of AXC's internet properties compares favorably with the others, and they appear to be growing faster than many of the more richly valued companies. If I am correct that internet sales will grow to $2.7 million this quarter, then if AXC's price remains at $4.5 the PSR will fall to 26. By a year from now if the price remains at $4.5 and my wild guesses of sales turn out to be accurate the PSR would drop to under 6, certainly not an obscene level for a company growing at 300% a year. Conversely if the PSR only drops to 20 then the stock price will rise to above 10 by a year from now. The above analysis assumes a relatively low valuation for Ampex Data Systems and Micronet, which they currently deserve. If HDTV conversions lead to larger orders for the DST, or the DST starts to be more widely used by large corporations as a backup device (PSINet is currently evaluating them for example), then Ampex Data Systems could deserve a higher valuation a year from now than it does now. Similarly Micronet is positioning itself in the middle of a very high growth area, and if they are successful in capturing any market share they could also achieve a higher valuation a year from now. I am baffled by your comments about BCST growing to a valuation of $300 billion. I think you are confusing their sales with their market cap, because their sales are minimal and even if they were 100 times bigger they would not gobble up GDP. I do agree that they are currently overvalued. If their sales did double every year for 6 years I am sure their PSR would still fall from its current level of 104. Thus their stock price will grow significantly more slowly than the rate of increase of sales. If AXC's internet sales in calendar year 2000 will indeed exceed $60 million as I anticipate, then the current valuation of the internet properties is not that unreasonable. Of course my average basis is much lower than the current market price, about $2, at which price I get the internet properties for free. The price was below that when I first pointed this stock out to you, by the way. Thus I think that at $2 this stock is extremely cheap. At $4.5 the stock does have some risk, but is not unreasonably valued based on its potential. At above $6 I was a seller, and at below $4 I was a buyer. From this point further stock appreciation is dependant on execution. I believe that AXC has the plans and the people to do the job, and that their execution will be very good, and that the stock will therefore rise from here. My advice is to watch the technicals. Carl

To: Zeev Hed who wrote (8476)	5/16/1999 7:43:00 PM
From: Carl R.	Respond to of 17679

Zeev, I would like to add that I have no special information regarding the sales of the subsidiaries, and that there is no particular reason to believe that they are close to reality. I have given you in my posts all of the underpinnings for these estimates, and they are certainly tenuous. Therefore an investment in AXC does require a certain amount of faith in the players. I would like to add to Michael's excellent post that the quality people that AXC has been adding would not be joining Ampex if they did not believe that AXC had the ability to finance it's growth plans. Michael and I have had some interesting discussions on this thread, but we both agree that Ampex will need additional funding by year end. We also agree that Ampex certainly is aware of that need as well, and we both have confidence that they would not be undertaking these risks if they did not have a financial plan as well as a product plan. Carl

To: Zeev Hed who wrote (8476)	5/17/1999 11:04:00 PM
From: Carl R.	Read Replies (1) \| Respond to of 17679

Apparently my estimates for revenue by TVoW were significantly low. I allowed only $200k per quarter for production, and it appears that last year the production revenue of Gardy-McGrath (now a division of TVoW) was $4 million. Therefore add about $800,000 per quarter to my revenue figures, which will significantly lower the PSR, perhaps to a level you find more interesting. This would make my revenue estimates: Q1 Q2 Q3 Q4 Q100 TVow $1.1 $1.5 $2.3 $3.8 $5.7 Reiter $1.0 $1.4 $2.0 $2.8 $3.9 AENTV $.5 $ .7 1.0 1.5 2.3 TOTAL $2.6 $3.6 $5.3 $8.1 $11.9 AXC @51% $1.3 $1.8 $2.7 $4.1 $6.1 In-house 0 0 .1 .5 1.3 Total AXC $1.3 $1.8 $2.8 $4.6 $7.4 With the current market cap at about $260 million, and allowing $125 million for non-internet properties, the trailing PSR based on the current run rate is now 104 quarters, or 26 on an annual basis. It is 8 times my projected next 12 months internet revenue. Keep in mind that unlike most current internet IPOs, all three divisions have been marginally profitable in the past. All three are now expanding quickly even if it means losses in the meantime, but all three have a business model that has been proven to translate to profitability. Returning to my comparison with other internet video operations the comparison now looks like: Sales Mkt Growth ovr Annualized Profit Q1-99 Cap Q1-98 PSR Q1-99 RNWK $23.5 $5900 88% 63 (.7) BCST 10.3 4300 127% 104 (3.8) IATV .4 560 11% 350 (7.4) VDAT 1.1 184 943% 42 (1.1) AXC's share 1.3 135 300% 26 ??? Once again, this is based on my best guess as to the status of the various divisions at the current time. Carl

To: Zeev Hed who wrote (8476)	5/18/1999 9:52:00 AM
From: Carl R.	Respond to of 17679

So Zeev, now when the June financials come out you will get a picture of TVoW as well as Reiter: Message 9582514 Carl

To: Zeev Hed who wrote (8476)	5/27/1999 10:39:00 PM
From: Carl R.	Read Replies (3) \| Respond to of 17679

Hi Zeev. We've got some numbers on TVoW's revenue from this article that was just posted: amcity.com In 1998, TV onthe Web brought in $750,000, a hefty portion of Gardy-McGrath's revenue of $4.25 million. This year, TV on the Web has already rung up revenue of $1.5 million. Apparently the revenue for TV on the Web is significantly ahead of my projections in post 8475. If they have done $1.5 million already with only 15-20 channels operational, what will they do in the fourth quarter with 100 Channels operational? I presume they'll do $10 million or more. My guess is that by the middle of next year TVoW exceeds Ampex's current size. With this kind of growth, that PSR will get knocked down to size in no time flat. Carl