Dovarri Inc (DVAR): With GSNH/DVAR, make “NO MISTAKE&#...

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stervc

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Sunday, 01/06/2008 5:49:18 PM

Sunday, January 06, 2008 5:49:18 PM

With GSNH/DVAR, make “NO MISTAKE” about it…

I am still very bullish about GSNH/DVAR. I was wrong in thinking that a reverse split would not be done. I was not very happy about the reverse split, but you have to ask yourself this one important question…

Would you rather want to have 150 shares of GSNH at .019 per share ”with no valuation and no future” or would you rather want to have 1 share of DVAR at $2.85 per share ”with some valuation and a future” placed into it?

Let me further explain…

If this was some kind of reverse split that we normally see in the pink sheets, I would have sold, licked my wounds, and moved on. This reverse split was done very abruptly and confirmed to have been done for a purpose; the reverse merging of Dovarri into GSNH which is now DVAR. I also think it was done too to lock in on Institutional Investors to prepare DVAR for going to a major market such as the NASDAQ, NYSE, or AMEX.

The affiliation list of Dovarri is too huge and great in name to remain on the pink sheets. I do not think that Dovarri will react like your average pink sheets stock. I think Dovarri really is doing the reverse split for the best interest of the shareholders; to get us out of the pink sheets.

Considering how low the float is now, it should move much quicker too and be easier for Institutional Investors to lock in on maintaining a nice position of the Float to ensure major market price requirements are met by not enough selling to transpire from retail investors due to the decrease in our positions.

From previous posts within the forum and because I also made some phone calls to confirm, it is known that DVAR has Hewlett Packard (HP) as a major partner which trades on the NYSE as HPQ at $46.00+ per share. They also have Admin Staff as a major partner which also trades on the NYSE as ASF at $27.00+ per share. Again, those who don’t believe such please go back and review many of the previous posts within this forum to get numbers of HP and ASF to call and confirm for themselves.

The link below confirms that Admin Staff (ASF:NYSE) has 102,375 employees:
http://finance.yahoo.com/q/pr?s=ASF

The link below confirms that Hewlett Packard (HPQ:NYSE) has 170,000 employees:
http://finance.yahoo.com/q/pr?s=HPQ

Let’s ignore the remaining DVAR clientele and customer base and only just consider using “half” of the employee combined numbers for HP and ASF alone to give us a total of 136,188 for employees. Let’s figure that this very well could be a conservative amount of Users Per Month for the Dovarri software as this is only from 2 companies out of the previously mentioned 2,500 companies they have as their clientele from the article below:
http://www.bizjournals.com/houston/stories/2005/02/07/daily19.html?jst=s_cn_hl

The above article was published in 2005, but below is confirmation by HP from their website that Dovarri is still going strong as of 2008 to support the above article as a conservative amount:
http://www.hp.com/sbso/wireless/sales_force_automation.html
(You can also easily verify by looking at the 2008 date at the bottom of website.)

Cost of Software (Minimum) = $64.95 Per Month Per User
http://www.dovarri.com/buynow.html

Before reading any further, understand that below is a framework for you to consider using to help you assess the true valuation of DVAR once “official” numbers are released for financials.

$64.95 x 136,188 Users Per Month= $8,845,410 Revenues Per Month

$8,845,410 x 12 = $106,144,920 Revenues Per Year

Without actually seeing their financials to know their Expenses, I think it’s safe to figure in a 25% Profit Margin from the $106,144,920 in Revenues resulting in $26,536,230 as Income/Profit.

Pre-reverse split GSNH/DVAR Share Structure per pinksheets.com as of Aug 14, 2006:
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=gsnh
(Click where it says “Company Info”)
Authorized Shares (AS) = 150,000,000 Shares
Outstanding Shares (OS) = 44,166,399 Shares
Float Shares = 26,948,890 Shares

Post-reverse split OS = 44,166,399 Shares ÷ 150 Reverse Split Ratio = 294,446 Shares

Now let’s figure that Arturo is correct with his logic of the previous Outstanding Shares (OS) equating to 2% of the new OS share structure post-split. I think that is very conservative, so let’s go with that thought for a worse case scenario:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=25569573

Solve for X with considering… 294,446 Shares equates to 2% of what total amount of Shares?

Solve for X where… X=New OS

2/100 ÷ 294,446/X
2X = 29,444,600
X = 14,722,300 Shares

New OS = 14,722,300 Shares

Now let’s incorporate what we concluded above for Income with this new share structure to determine an Earnings Per Share (EPS):

Income ÷ OS = EPS

$26,536,230 ÷ 14,722,300 Shares = EPS
$1.80 = EPS

With using a conservative 12 PE Ratio as a conservative multiple for its growth rate within its given Market Sector and Industry, observe below:

12 Conservative PE Ratio x $1.80 EPS = $21.60 Current Share Price Value

Well, let’s get technical about this since GSNH/DVAR would trade within the Technology Sector. The PE Ratio for the Technology Sector, in which GSNH/DVAR would trade, as with their competitors such as VWM @ $80.00+ or CRM @ $58.00+ is the PE Ratio of 47.69 as indicated within the link below:
http://biz.yahoo.com/p/8conameu.html

This is not saying that GSNH/DVAR is worth or will trade at the same price levels of VWM and CRM. It means that it is fair to consider GSNH/DVAR maturing at the same growth rate as its Sector and Industry competitors, especially since it is considered a leader by some within their Sector and Industry (see older posts). This also means that it would be fair to use as a multiple, the 47.69 PE Ratio for its Sector to get a potential share price, but I’ll let you do that math to figure that one out.

I think you see why the number 12 was used as a conservative PE Ratio. My point that I am trying to make is that the above is nothing more than a framework to use to help consider the value or worth for GSNH/DVAR after finite numbers are released as confirmed financials. Simply replace the above key variables in the formulas above to get a general idea.

Keep in mind too that I only used 2 out of 2,500 companies to derive those above variables. With huge support from HP and ASF, I think more value should be considered knowing that they could very well have greater customer/clientele than from those two alone. The price should reflect such because of having a lower Float too. I suspect that any added shares to be part of the new OS will be restricted which means that the Float from what was last recorded as indicated above would be:

26,948,890 Pre-split Float Shares ÷ 150 = 179,659 Post-split Float Shares

The reverse split caught many off guard, but it was discovered in time to where anyone that wanted out had more than enough time to get out. For this, I suspect that DVAR should begin its move upward from here.

Again, this is not just your average pink sheets company simply doing a reverse split to repeat the dumping of shares unto their shareholders. With any kind of inclination of huge valuation (as I think already exist), it will run that much faster because of the much lower indicated Float above. This is a multi-million dollar company reverse merging into a public entity to exist as a viable company/stock in my opinion. I think we should really focus on the upcoming news to be released to either confirm or unconfirm my thoughts. The former GSNH is no more and I think the new DVAR will prove to be very solid.

v/r
Sterling

Sterling's Trading & Investing Strategies:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=29867262