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interesting, thanks for the link
from the wiki link...
"Renaissance represents a validation of the quantitative trading model and trades with such high frequency that it (the Nova fund, specifically) accounts for over 10% of all the trades occurring on NASDAQ some days."
all i can say is wow
pretty sure you can answer those yourself
Snow, if I take the 1.5 mil license fee out of both sides of the equation... meaning take it out of spzi's revenues and out of 141's operating costs, the net profit of 141 goes up quite a bit (for the $1mil input scenario), and this would actually bode better for the spzi share price imo. I get somewhere around 4.5 cents per spzi share doing the same analysis without considering the license.
good luck, just my opinions
gbathat
Thanks Snow. I did consider these thoughts initially. It may be technically incorrect to include the 1.5 mil as sustained revenue, but for my own personal valuation, I decided it would be good to include the 1.5 million as it will recur in other forms in the future.
While 141's license is perpetual, this will not be the case for other SWARM licensing contracts, in which license fees will be major parts of the sustained revenue stream. However, with the 141 deal, I believe the licensing fee will eventually become insignificant relative to the other revenues from skimming and increased 141 share price.
With regard to the o/s for 141, my information came from this board, particularly Allie's estimate of 40% ownership based on her conversations with management. Since she read my post and did not object, I feel this is okay for the time being. However, I definitely left this a variable on my spreadsheet;)
Thanks for your feedback. I appreciate the education I'm getting around here.
Thanks for the replies all. Glad to see many of you are also thinking about spooz today!
With regard to the initial share value of 141, I have no idea what the price would be. My guess is that it will depend on the assets of the company, basically the amount of money Paul & Co. bring to the table. Other than that, the company won't have many assets of great value, so I'd guess the initial share price would be a reflection of the cash put into 141 and the predictions for revenue in the immediate future. We should get a clear picture of the value as the progress reports come along.
Hey Newbs and Longs, read me!!
Clearly, the last PR's are complicated enough that it's not easy to see the implicit effects on spzi value by some of the current shareholders and perspective shareholders.
Therefore, I will outline a PPS estimate method to demonstrate why I believe spzi shares are currently way undervalued in light of the recent news.
WARNING: THE FOLLOWING ANALYSIS WAS NOT PERFORMED BY A FINANCIAL EXPERT AND SHOULD BE CAREFULLY CHECKED BY ANY USER. IT IS NOT INTENDED TO SERVE AS INVESTMENT ADVICE AND SHOULD NOT BE CONSIDERED AS SUCH. IF YOU DO SEE SOMETHING WRONG, LET THE BOARD KNOW ABOUT IT!! THANKS
We know 141 will begin using SWARM in October, trading initially with their own funds.
Let's conservatively assume they only put $1 million dollars into SWARM. Let's also conservatively assume that SWARM will increase the initial investment by 400% in 1 year. (The value calulated for this before on our board was 600%, based on July PR).
This results in $3,000,000 net profits of the SWARM engine.
Now SPZI profits from this in three ways-
1. Licensing fee- we get 1.5 million this year
2. We get 7% of the net profits from SWARM- 0.07 x 3,000,000 = $210,000
3. We get increased value from the associated 141 share price... this one's more complicated
Let's conservatively (relative to Allie's 40% estimate) assume that we own 33% of the 141 shares. That would mean there are a total of 360 million 141 shares. Because 141 will initally invest only their own money (thanks jcrom) into SWARM, their net profit will equal the SWARM net profit minus the 7% cut to spooz, their operating costs and license fee. I WAG'ed an operating cost of $800,000 per year ( a few employees, rental space, Kauderer payments, etc). Thus for this scenario, the 141 earnings per share would be estimated as:
($3,000,000 - $3,000,000x0.07 - $800,000 - $1,500,000) / 360,000,000 shares = $.0014 per share
Applying a conservative P/E of 10 yields 1.4 cents per share for 141. Spooz owns 120 million shares, so the value added to spooz would be $.014 x 120,000,000 = $1,633,333.
Thus, for the next year, SPZI would have an influx of 1.5 million from SWARM licensing, $210,000 from SWARM skimming, and 1.63 million value added from 141 partial ownership.
If thought of as revenue, the earnings per share of SPZI could be estimated as:
($1,500,000+$210,000+$1,633,333) / 1,500,000,000 shares =
$0.0022 per SPZI share
Applying a P/E of 10, I'd expect an increase in share price of $.022
CLEARLY, THE NUMBERS USED HERE ARE GENERALLY VERY CONSERVATIVE. AND BY CHANGING THE AMOUNT INVESTED INTO SWARM BY A FACTOR OF 10 ($10,000,000), THE RESULTING SPZI SHARE VALUE ADDED COMES OUT TO BE $.59 !!!!
So all 141 needs to do is get enough capital to throw into this money press, and we will benefit tremendously.
And the true benefit comes with ownership of the 141 shares. The $1.5 mil license fee is a small perk for the startup phase. The 7% skimming doesn't do a whole lot for us, but could probably cover a good chunk of spooz operating costs in the future. The 7% skimming will be more important when 141 is putting other peoples money into SWARM.
ALL MY OPINIONS. GOOD LUCK TO ALL! I'm saving up my pennies to get more shares...
peace,
Gbathat
updated pps estimation model for spooz
It's too hard for me to post it on the board. Please PM me or post your email if you want a copy of the Excel file. Remember, I am not a financial expert, so do not use it for your investment decisions ... just a fun toy to play with.
peace,
gbathat
ms. garner.
i think you missed my point completely. The license fee is not where the money comes to spooz. The partial ownership of 141 is where the true money will be made. That is why the license fee was so low.
gbathat
jcrom, thanks for your insights.
That's good news about the use of 141 funds in SWARM as it will give us more rapid returns... a lot depends on how much they put in to SWARM.
How much do you think 141 could conceivably bring to the table in October? It has to be at least enough to produce gains greater than 500K a quarter;) but hopefully they'll bring much more.
I prob won't get the model up any earlier than late tonight.
Good luck to all,
gbathat
aww dudes, i just spent half an hour putting and explaining the model on a post and my dial-up kicked out... lost it all
i'm exhausted, so i'll just post my conclusion from my calcs and get the model up and explained later
just my opinions, not investment advice. i am not a finance expert.
I estimated that that if 10 million bucks are put into SWARM, 1 million by 141 itself, and 9 million from outside investors, then the SPZI revs would go up by .004 cents per share, resulting in an actual share price increase 4 cents.
What's most interesting is that the more of 141's own money that they put in, the more drastic the SPZI pps increase. This is due to the much higher net profits by 141 when they're using their own money, rather than skimming off investors.
While 141 may have to skim off investors initially, as they build capital, they should throw it back into SWARM rather than paying out dividends, at least for a while.
If we got to the point where 100 million was being thrown into SWARM and 10% of that input was 141 capital, we could see a $1 increase in the SPZI share price. I don't think that scenario is too unrealistic.
Again, this is all based on a model that I built in Excel that needs to be audited by the spooz crew. I'll get it up as soon as I have the energy... but 14 hours at work today took it out of me.
all my opinions
peace and good luck,
gbathat
i just did some back of the envelope calcs regarding the last two PR's and potential SWARM inputs and expected outputs, and how that would affect the 141 share price and our associated revenues, and the numbers I'm getting are absolutely huge. A lot hinges on how much money would go into swarm and where that money comes from/ how much 141's profit margin will be.
I'll try to put the calcs together in digestable format for the board tonight.
peace, and good luck.
all my opinions, not investment advice.
Gbathat
looking good spoozcrew!
I have to say I am shocked at the stagnant share price... just goes to show how few people understand the potential of this company and the strength of its leadership.
These last two pr's were very interesting, and to me, totally unexpected. We were all wondering how SWARM was going to be played, and now we know, for the most part. So far, I'm liking what I see. Obviously, from the PR's and the emails from Paul, it was a complicated process getting it all worked out. In the end, we have a signigicant stake in the company that will likely profit the most from SWARM along with a cut of their profits, all at minimal risk to us.
1.5 million is a decent number, but it sounded a bit small to me at first. Still, I'm guessing anyone throwing that much dough out to license it is also planning to throw some serious cash at it, and must already have investors lined up (the money press starts rolling in Q4!). However, in the big picture, 1.5 million is peanuts compared to what this thing will eventually kick out in revenues, and that's where our 7% and partial company ownership comes in. I have to think that the SWARM % profits returned to spooz will be more than enough to cover the Spooz operating costs (if I recall, this was the plan initially w/ SWARM) and make 1.5 million pale in comparison.
Which begs the question, why is the share price just hanging around at a penny? Our rate of revenue for the next three quarters will be at least 2 mil per year (rate). The launch of spooztoolz will certainly bring in a similar amount of cash in the not-too-distant future and much more to follow. And then we have the millions of dollars to be injected into the company in the deal that caused the quiet period... so at quarters end, we could very well be bringing in 10 million per year (rate). In six months, the revenue rate should be much higher...
I guess the market needs more info. Their loss. It will be fun to watch once the scramble for shares. As a popular G once said to me, "you can have mine- for five bucks (each)!" better make that "some of mine", cuz I'm way long on spooz and I refuse to put boundaries on its future.
All my opinions. Not investment advice.
good luck to all, and keep getting the word out about spooz (put your mouth where your money is!)
Gbathat, and I'm all in.
How can you argue this???
good question since we have no updates regarding revs or reason to think otherwise
they only need to be hitting millions a year by year end to meet projections, which is very possible... they don't need many high end traders to do that
or how bout a 50 million dollar licensing agreement to use swarm?
i don't think we know what the rev projections are but i think they'll be the same or very possibly better
just my opinions, not investment advice
balancing risk
jmo
gbathat
completely agree
need to consider expected net income of the company in looking at O/S. I think we're looking great, based on calcs done previously on this board and my own calcs.
As an example, let's estimate a share price based only on STv2 subscriptions
Let's say they get 5000 high end traders using this puppy by January, loaded w/ the add-ons, at ~$600 per month
5000 customers x $600/month-customer x 12 months would give revenues of $36 mil per year
Applying a .33 profit margin (I think this number will increase as the launch gains momentum) gives us $12 mil net income per yr, which equates to about .009 cents per share.
Next, don't forget the P/E ratio, which just might be screaming high for an emerging company, but we'll use a conservative value of 10, resulting in a final share price of 9 cents.
Now this does not consider SWARM and any deals.
just my opinions, not investment advice
good luck
gbathat
that surprises me a bit, since the market would be open for 30 minutes at that point... maybe it's still coming before then...
anyways, I've got to get back to my work and will check back in asap... hope to celebrate good news with you all later
good luck to all
sweet, thanks for sharing! looking forward to it!
??????? !!!!!!!!!!!! please elaborate... from who? 9am est or cst?
thanks,
gbathat
spzi on another radar
http://www.chart-cafe.net/scharts/indexCharts.htm
looking forward to seeing the updated webpage hits from alexa.com, i think it should update the numbers tomorrow or sunday. we should be able to get a rough idea of just how many folks have checked out the demo and how many people may have been on that Notify_me@Spooz.com email list.
I agree, if that is not a pumper or maybe if it's at least an honest pumper;). He/she only has eight posts, many of them on that thread, but at least the join date was back in April as opposed to many on there that joined recently and are clearly prob from our community of spoozaholics.
http://www.elitetrader.com/vb/showthread.php?s=e557ec5c94c46b22ed7aa7da478f9a8e&threadid=97255
looks like a bit more activity on elitetrader board... nothing much to speak of... the post has been viewed 2500 times though, so maybe it's attracting more viewers to the demo.
gbathat
also, don't transactions have to go through a broker??? this would present an extra barrier I would think, if transactions are being carried out for a non-licensed user. just my guess, this stuff is far from familiar to me.
response from Chicago Tribune Finance reporter that I emailed about Spooz last night...
From : Benderoff, Eric <EBenderoff@tribune.com>
Sent : Thursday, September 20, 2007 10:23 AM
To : "Martin *******" <****************@hotmail.com>
Subject : RE:
| | | Inbox
Looks interesting, Martin.
Thanks for the tip.
Eric
Eric Benderoff
Technology Reporter/Tech Buzz Columnist
Chicago Tribune
435 N. Michigan Ave.
Chicago, IL 60611
(312) ***-****
-----Original Message-----
From: Martin ****** [mailto:*************@hotmail.com]
Sent: Wednesday, September 19, 2007 8:35 PM
To: Benderoff, Eric
Subject:
Hello Eric,
Thought you'd be interested in checking out a Chicago-based trading software startup company, Spooz, Inc. You can get a brief demo of the software at http://www.spooztoolz.com . I was very impressed.
Thanks for your reporting.
Martin
SPZI Shareholder
Hey Lakers,
how did you like the demo? Have you seen one live before? I know you have posted here for a long time as I often go sifting through the old school posts.
good luck and stick around
gbathat
tick tock tick tock
I would be more than happy to apologize to you if the news comes tomorrow (you posted that "info" on Sept 10), even if it's just coincidence.
good luck gbat
10 days eh?
I took the liberty to email some Chicago Tribune financial reporters about the online demo... I figure they might be interested in the software or the spooz story
any other creative ideas to help get the word out ? (preferably only via a few mouse clicks:D)
Thanks airdale.
actually, his language was a bit stronger than I recalled, which is good.
"I can assure you that Spooz is not contemplating increasing the authorized shares, is in no way considering a reverse-split of its common stock, and will not engage in any further 504 financing."
did I just rebuke myself, why yes i did, somebody call the shrink!
i agree and disagree
I would want some communication from the company regarding share structure security (I think October is a month when financing/dilution becomes an option again. However, Paul's correspondence regarding share structure also said no more dilution in the foreseeable future... how far is that???)
Other than that, I can wait, though I'd obviously prefer news tomorrow.
Also, I'm going to track down that now infamous "10 days" email. I'd like to get to the bottom of that issue. If anyone beats me to it, I won't complain since I'm on dialup and not an Ihub "member".
peace to all.
strong agreement on that observation. i trust fedfunz anywhere though, so long as someone didn't steal his identity:D
brief opinions of the last few monthz
It's been an interesting time to say the least.
We were literally days away from launch, and then the quiet period swooped down upon us at apparently the most inopportune time (as a shareholder). Now here we sit, two months later, anticipating the PRs.
Looking back, several important points have jumped out at me.
1. The Q2 report shows funds are tight at this brilliant startup company where the staff has sacrificed much for their dream. This is an important lens through which to view the quiet period and associated deal. Why stifle the launch when funds are drying up and it is the main revenue stream days away from being implemented? Conclusion: this deal must be huge.
2. There have been many ideas about what this deal could mean and entail for the company. If you scan through the litany of wonderful emails from Paul (assembled by our great mods in the ibox above), one should jump out bigtime- The email from Paul to Allie in which he mentions being approached by brokers to establish the holy grail, a transaction based software that would become a crucial part of the infrastructure of a virtual exchange that could someday move trillions per year. This email was carefully constructed and delivered not too long before the onset of quiet in Spoozland.
3. I was recently troubled by posts by fedfunz on the elitetrader board mentioning the fact that STv2 is still being beta-tested in a small circle. I thought to myself, how could they have been days away from launch before and still beta testing this thing on a small scale now. After thinking about it, I realized that perhaps they were rushing the launch because they needed the revenue. With this extra deal on the table, perhaps money is not an issue for a while. Thus, why not spend more time perfecting the software before launch? It makes sense to me.
These are some of the opinions that I've formed during the last few months, mostly based on information and insights from you all. I think the PRs are going to blow us out of the water.
opinions only, not investment advice.
Good luck to all.
Gbathat
time will tell
whether we know it's coming or not, we still have to wait!
seeya'll tomorrow
gbathat
haha, me likey the spicy!
congrats on being a mod, certainly well deserved... occasionally I go fishing through old posts from a year plus ago, just to see what the board was like back then, and lo and behold, I see many ww posts with just as much energy. You and the other longs have done such a good job supporting this company... soon you'll have your reward.
good luck sir.
gbathat
Wing, based on Paul's emails, I strongly feel the virtual exchange is the issue at the table... not a buyout though. My guess is an investment by someone like google in Spooz to create this holy grail aka ebay for security swapping. I don't even think the entity wishing to inject millions into the company will necessarily buy any part of Spooz. It might just be funding for a project and if it goes well, an agreement for exclusive use of this matching engine for the virtual exchange.
just my opinions folks, but I don't think Paul could have spelled it out much clearer. The only hangup would be that sizeable disclaimer he threw in that message, but I think we are in way over our heads (in a good way).
what's crazy to me is how the launch was essentially put on the backburner for this deal... it must be huge if Spooz is going to take the focus off their major revenue stream, especially since funds were getting tight as can be seen in the Q2 report.
only my opinion, not investment advice.
glta,
gbathat
(edited) sidenote: when I said the info "concerns me", i was referring to how shareholders might react if the launch does not happen in September. I still am a strong believer in the company and their product and am in for the long haul.
those opinions posted on elitetrader certainly fortify my opinion... many thanks to wing for posting that link, i'll definitely be checking it out throughout the week.
just my opinion, good luck to all.
Wing, thanks for sharing this info...
here is something i saw on the previous page of that mb that i think should be shared here as well. It concerns me a bit since it was posted yesterday. Fedfunz, if you are allowed to comment, can you explain if this has any ramifications with regards to our communal expectation of a September launch? I know many of us have been speculating that people were already using (and paying for) STv2. Does beta testing involve payment by the user, or is it generally done for free in exchange for feedback?
-------------------------------------------------------
http://www.elitetrader.com/vb/showthread.php?s=5936b70384b8d4d67e0076502d45eb89&threadid=97255&a....
fedfunz
Registered: Aug 2007
Posts: 1
New Post 09-16-07 03:51 PM
Spooztoolz is in limited beta test right now. I have had several exstensive demos of the product and it has many unique features I have yet to find in any other software. The new demo video on their website offers a very brief intro to it. If you are in Chicago you can arrange a demo for yourself. They will answear every question you have until you are satisfied.
hey silver,
if you have other questions that you feel are not addressed in company PRs or in messages linked in the ibox above, please feel free to post them
i think people just get tired of answering questions to which answers are accessable above in the ibox, put together by the wonderful mods here
good luck
http://www.alexa.com/data/details/traffic_details?url=http%3A%2F%2Fwww.spooztoolz.com
hey check out the one week averages... blowing the 3-month averages out of the water... demo induced??? it'll be interesting to watch the web traffic this week.