Gold River Productions Inc (GRPS)

[Roofus]

Could you imagine if they drop a $40 million revenue contract PR to us, in the blink of an eye one day?

$40 mil revenue
45% profit margin = $18 million (earnings)
P/E ratio = 50
$18 mil * 50 P/E = $900 million market cap value.
$900 million / 1.23 billion shares = $0.73 per share.

PPS would explode up to $1.00+ on this news release, and then pullback and settle in the $0.65 - $0.80 range, with an average in this range at $0.73 per share.

Now, if they were to drop an $80 million revenue contract, this would probably go to $3.00 or $4.00 and then pullback and settle in the $1.40 - $1.80 range.

The P/E ratio would be higher on a larger revenue contract or announcement, as the P/E ratio is often higher on faster growing stocks.