Eagle Worldwide Inc.(fka ELWD)

[sedaohr]

How a buyout works is either a person or a company buyouts existing shareholders of a company because they prefer to own the entire company. In this case, I don't see an individual as buyout out the company. What IS probably happening is Pan America Sociedad Anonima is going to buyout our American company, giving them full control of what is going on and all of the revenues that comes with it.

Why should they do this? Well, for starters, if Panamanian accounting practices are the same as U.S. standards (internatal standards are usually very similar), then PANAMERSIA is already reporting their holdings in the stock as equity accounting practices. That means if they own more, then the better their earnings are. Why not buy us out now before the company reports 2, , or 4 quarters of continuous growth? It is smarter to take the company private now instead of spliting the revenues in percentages. Especially if they are so sure the growth is going to continue.

Assuming that PANAMERSIA is buying our shares, then what that means is they need to figure out the assets and liablities on hand, future revenues projected, and recent share prices to decide what price the buyout will be.

Well, we already know the company had .0034 cash per share on hand December 31st, and the most recent quarter that is nearly over could have doubled that easily. That is first thing to think about. Then consider liabilities, which is so low that it is not even relevant to discuss! Next, key in future revenues, which MT PR'd the past quarter only scratched the surface on the revenue growth, and you will understand lots of cash flow is expected in the current year. Finally, figure that current share price is .003, with many having been in as high as .008.

Lets conclude: First, .0034-.006 cash on hand that PANAMERSIA needs to pay for. Next, future growth should be given a multiple of at least 2X-5X's. Minus liabilities that are negligible. Add a figure of around .0055 for shareholders that acquired the stock last fall. That finally totals a figure of around .0034 (cash on hand)+ .0102 (a growth multiple of 3X's) + average pps of .0055 = .0191 (the fair price per share for a buyout).

Of course, the stock price in my opinion will exceed this prior to the announcement of the firm price. That goes to say there are always some people on both sides of winning and losing.