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I'm looking forward to getting a better understanding of the revenue/profit number for September. If I have a clear understanding of the conversion of the Smash Clicks debt / Domain Portfolio ownership to a monthly payment, I can model my own estimate of monthy/quarterly earnings and growth.
We have to see the details of the debt reduction and how may preferred share are left out there to determine where the A/S has to be in case of debt conversion.
Ultimately, you are correct. But, we won't know until numbers are filed officially exactly what amount of reduction can occur.
Ok. I'm just trying to reconcile the view of it in the financials.
I read a couple links and understand it better. The EPS does not change. But, there is a drop in assets on the balance sheet. That makes sense now.
The trick part is understanding the goals and how a share repurchase fits into it. With a company trying to grow rapidly, it would make sense to spend these proceeds in acquisitions or marketing to expand quickly.
But, with SG's goal of quicky obtaining a listing on NASDAQ, a share repurchase would possibly be the quickest way to get the pps to the level it needs to get that listing.
Thanks for helping me walk through this. I think that it is important for everyone to have a clear understanding of what and why a company is doing things. Go SEEK.
$1,000,000 in profit and $1,000,000 share buyback or
$0 in profit and a $1,000,000 share buyback?
Obviously, the devil is in the details and it would be worded as "We used $1,000,000 in profits to buy back xxx shares". But, how would it look in the financials?
There are several ways to value a stock. In pinkieland, its mostly based on potential. But, in a simplified view, you can look at Assets minus liabilities plus the net present value of future earnings and dividends divided by the number of outstanding shares.
So, you do have to guess on future earnings. You can come up with an estimated pps by looking at similar companies and thier price to earnings ratio and applying it to the O/S and expected earnings.
The basics we have are 2.4 billion O/S. If the market values similar companies at a 50:1 PE, the company would need to make $48 million (annually) in profit to be valued at $1 share. Others may place that PE lower, others much higher.
So, when you ask what the company is worth, it's really "beauty is in the eye of the beholder"