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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: Tony Lagana who wrote (8245)	5/23/1999 8:24:00 PM
From: Secret_Agent_Man	Read Replies (3) \| Respond to of 30916

"Now, from Riyad Said Friedman...Likes us quite a bit...as you all know he updated First Call early Friday 21st., and is expecting .07c for our 3qtr. reportable on June 3rd., and 35 cents for year. Goes into s1 being filed ...'As has been widely speculated in recent weeks, Softbank (10.8%), AOL and GE Capital Investments (5.4%), have made equity investments in NTOP. IDT owns 66.2% of NTOP pre-ipo and we are assuming that the company will not sell any shares as part of this transaction. Consequently, IDT shold be the majority and controlling shareholder of Net2phone post-ipo. This structure is consistent with the scenario which we had previously outlined for this business. Strategic investments further solidify Net2phone's leaderhip position. In addition, to contributing to overall funding of this business, equity investments by Softbank, AOL, and GE should significantly bolster Net2phone's distribution channels and lead to a variety of new sales and marketing inititatives. We currently are projecting calendar 1999 and 2000 revenues of 40million and 70million respectively and we believe there is substantial upside potential to these numbers particularly 2000 as a result of these strategic relationships... Raising 12 mo price target to 38, core telecom value at 22 per share valued through a combination of calendar 2000 revenue, ebitda multiples and pe multiples...IDT currently trades at 1.18x calendar 1999 rev on enterprise value basis, while peer group is at .97x 1999 revs. Project calendar 2000 revs of 940mm from core telecom, and applying 15% discount to current peer group rev multiples, we arrive at 22 per share for core. Expect 2000 EBITDA 90mill applying a 20 mult arrive at 25 per share. Project calendar 2000 eps at .87 and applying 25x multiple (one times the low end of estimated growth rate 25-30%) arrive at 22 per share... Net2phone value at 16 per share...Calendar revs. 70mm applying a 15x rev. multiple, which is in he middle of the range, particularly for internet companies which are leaders in their category, yields value of 1billion or 28 per share. Expect IDT to own 55-60% net2phone post ipo, which results in implied value of 16-17 per share. As noted we believe there is substantial upside to our 2000 revenue numbers, which could lead to significant appreciation potential for this business over the coming months... We believe that the execution of this long-awaited net2phone ipo will enable the company to unlock the value and exploit its leadership position in this burgeoning market segment. This will also enable investors to more easily track both the core teleocm business and the net2phone business going forward. IDT should be reporting earnings june 2 or 3 and we are assuming the net2phone road show will kick off in late june or early july. NOt too surprisingly, the stock sold off on profit taking following the ipo announcement. We would expect the stock to display strength as the net2phone road show approaches. I would say that the company could say what I believe it was Hepburn said when she accepted her Oscar....'You like me, you really really like me...'" per HHBB, on yahoo BB, these are notes rom FBR, analyst.