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Re: Stock H.O.G. post# 183712

Friday, 07/07/2006 2:33:00 PM

Friday, July 07, 2006 2:33:00 PM

Post# of 286288
Sure. At a quick glance, Merrto's analysis assumes a couple of things that I do not.

For one, the COGS is majically reduced to 30%. What is that based on, wishful thinking? There's nothing to show that they will reduce the current number by a third. And the average rate of subscriber income is based on $17 (which is even higher than what has to be gzfx's major membership level) which again appears to just be wishful thinking.

It could be that the average per sub is something in the $15 area. Clearly, I'm just averaging the membership levels because that's what I have found works time and time again. If it actually is $15.89 and not $14.75 like I projected, I was only 7% off. So, maybe best case scenario is break even around 140k.

Funny, when looking at Figure 4 on Merrto's analysis. Based on the continued operating expense, my numbers for breakeven are really close to what he has there. Of course that's assuming costs and income continue on their way as they are. There's nothing but hope to think that they will change for the beter, but if things do turn out to be better than projected, which I am hoping for, then we'll start to see this PPS rise.