CASH COW

[stockmann]

Lor,

You see this? From another forum....Good stuff

Interesting point you make.

As you note, others in the space like ONSM for example have in fact been buring cash having yet to reach profitability. Ironically, I don't believe YouTube or any other recent acquisitions in the space have actually even been close to profitability prior to their acquisition.

Despite investors and the markets excitement about Modavox having rewarded the company with nice gains in recent months, people are still not fully aware of one of the most compelling investment attributes of the company, it's EARNINGS LEVERAGE.

The new management team of Modavox runs this company like they're spending their own money, and they essentially are since they own over 12 million shares. They run lean and mean only taking nominal salaries often not seen in many public companies. To them, it's a complete equity play and they too are betting on the company's stock along with all of us shareholders and I think we all know the only way they are able to cash in their own chips is through an eventual liquidity event i.e. sale of the company.

Here's the other key aspect of the story that most don't yet comprehend, their margins run around 70%! As they scale and ramp their topline, the majority of it goes straight to the bottom line generating substantial eps. Although we began to see this leverage materialize last quarter when they turned a million loss into a 50k profit, it should become much more apparent in forthcoming quarters and filings.

At such point when this company is eventually doing $20-$30 million in revenues over the next few years, assuming they are not bought long before, don't be surprised to see roughly $14-$23 million of it flow straight to the bottom line resulting in huge net income and amazing eps. The company is literally a "cash cow".

In conclusion,

Modavox has excellent management with major skin in the game and their goals alligned with ours, they have valuable patented technology and IP, they own the premier on-line internet radio station with premium in house produced content and over 5 million unique visitors, they have an established multi-year old patent likely being infringed upon by some major media companies, they are partenered with Akamai, they are likely acquired within 12 months by a host of companies and last but not, they have incredible EARNINGS LEVERAGE which will drive eps and share value as they ramp revenues.

I am adding on recent weakness viewing it as a buying opportunity with my 12 month target price currently remaining at $5.