Wednesday, January 14, 2004 10:31:47 AM
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"Hasn't one of the issues that's restrained DNAP from a viable alliance been how Tony (and us!) values the worth of his company and IP?"
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It is the apparent disconnect between tangible value and perceived value that controls the price of this stock. While the potential promise of the IP seems to be significant, the actual value of the patents cannot be established until they have been issued and the market can bid on them. Until that time the company has virtually no other tangible assets. They rent the building and the most important equipment belongs to GMED. (While DNAP seems to have a valid claim on it's usage, they certainly cannot consider the equipment as a financial asset.)
They have begun to develop an income via their Ancestry/DNAWitness offerings, but they have yet to achieve breakeven.
Virtually the entire 'equity' value of the company therefore, resides in the perceived valuation provided by the shareholders. The entire $30 million market capitalization depends solely on the confidence of the investors.
In order to establish a valuation for the purposes of merger/alliance/acquisition, one of three things need to happen.The IP needs to become tangible in the form of issued patents, the targeted 'partner' needs to share the intangible 'confidence of the present investors,or DNAP needs to establish itself as a self sustaining business entity with conventional fundamentals.
Time will tell. Either the patents will issue, (or they won't) and their value can then be determined in the market, or a knowledgeable partner will take a risk. We will see.
regards,
frog
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