SaviCorp (fka SVMI)

[Alibi95]

A share buy back.. excellent!

How many should they buy back? And how long should it take?

As they buy back, the pps would go up making the next shares they buy, more expensive.

An exchange like NASDAQ looks for a pps of $4, or $3 to $2 under certain special circumstances (http://www.investopedia.com/ask/answers/121.asp) in order to be listed. More than likely, SVMI would apply under one of the exceptions with a pps in the $3 to $2 range.

The numbers get complicated as they change together as the buy back happens and the pps moves up, there are millions of possible ways to run them. I'll throw one out.

Take what we know, $700m over 5 years, assuming 33% profit, annual net income of 46,200,000, With a PE of 17 (industry average of after market auto parts), that would make SVMI a $785,400,000 company, at $2 a share (minimum under special circumstances), they would need to have no more than 392,700,000 shares outstanding. Simple rounding, they need to buy back 5.6b shares for that to happen.

Lets say they put every nickle of profit, $231,000,000 into buying back shares over the next five years, they would need to average the buy back at $.0413 a share and end up in five years with a pps of $2.

There is no way, even with every dollar going into the buyback to get 5.6b shares at about 4 cents a share average ending up with a pps of $2, even over the next five years. 4 cents and 2 dollars are just too far apart for that to happen. The raw numbers, even with 6b shares out there indicate that SVMI should be well over 4 cents a share in my opinion once they are current and revenue starts coming in from FlyingGlob. Pruely as an example, if one were to take the $785,400,000 I used above above with 6b shares outstanding would give us a pps of $0.1309. We simply do not know enough about the revenue stream and profits to make a much more educated projection of the pps at this time.

Obviously, setting up a program to use profits for buying back shares would be a huge plus and should be part of the long range plan for SVMI, I could not agree with that more.

They simply can not buy back enough shares with the resulting increases in pps to set SVMI for a move over to NASDAQ without a reverse split.

If the intention and desire of SVMI and it's shareholders is to have SVMI buy back shares and stay on OTC, then no reverse split is necessary or needed. Don't do it.

If the intention and desire of SVMI and it's shareholders is to have SVMI buy back shares and move to say NASDAQ, a reverse split may be necessary and it will be a good thing. Do it when the timing is right.

In my prior post, I was only looking at the eventual need for a reverse split and why it could be positive and the benefits that would result.

Obviously, a share buy back needs to be one component moving forward, but a share buy back alone, will most likely not get them over to NASDAQ. Imagine that, $2 a share without a reverse split.

I'll go on record, SVMI should dedicate some of the profits to instigate a share buy back, and that when the timing is right, examine the share structure, and if necessary, do a reverse split in order to move SVMI over to another exchange, such as NASDAQ.

I think the goal is to get SVMI out of penny land. What happens to floundering companies in penny land in order to stay afloat (ie. reverse split and continued dilution in order to raise money) is not really part of SVMI's future. I much prefer to look at what it will take to get SVMI out of penny land and over to say NASDAQ, if that takes a reverse split at that time, I will support it. I also do not think they should wait five years and keep the average pps at about 4 cents over that period of time to do it.