An incomplete evaluation:
I have claimed that before we can suggest an appropriate share price, we need:
1) Current financials
2) Share structure with OS
3) A clear picture of product quality, and market potential
We don’t have any of these completely right now, but we do have partials. We have:
1) Financials to the end of last year, with an expectation of more filings, and a rough (but reasonable) understanding of what has gone on in the first 3/4 of 2007 … startup and advertising costs balanced to some extent with some early income from RealTime subscriptions.
2) We have an OS to Sep 30 of a little under 10B, with an un-gagged TA presumably coming very soon.
3) We have an existing product that provides Real Time Level 2 depth for Pinks that most other sources don’t, and a subscription price that beats those that do have real time depth for Level 2. We also have an expectation that the blemishes on the currently released version are about to disappear, and that a significant improvement in the presentation of the related data based information (charts, TOS histories, etc.) are also about to improve.
Perhaps we can get a feel for where the share price could be from the partials listed above.
Let’s assume that the next product release is clean, it performs well, and is priced to be a good deal for what is offered. We’ll also assume that there will be enough income from product subscriptions to allow the OS to remain constant. While we’re at it, let’s use the original subscription response of about 2,000 subscriptions (all of which were either free or at a low introductory price, plus exchange fees) as an ongoing number. Many of this group will have let their subscription lapse, but others will be added if the next release is what we hope it to be. While we’re at it, let’s assume that iFinix continues with the sort of low operating cost that they have shown so far. Let’s retain about 70% if income for earnings with the other 30% going to expenses. Software companies often do much better than this 70% gross margin, but not in the early stages.
There is LOTS of room for error here, but let’s see where this takes us:
2,000 subscribers at $60 per month for a revenue stream of $1,440,000 per year
giving an income per share (at 10B OS) of $0.000144
and an earnings per share (with 70% GM) of $0.0001
With a typical Share Price to Earnings ratio of 20:1, this yields a share price of $0.002
On the surface, this indicates that the share price could move shortly to 0.002 … that is, to 10 times the current share price of 0.0002
What could happen though (assuming that the products ends up doing what it was planned to do in full)?
We’ll certainly end up with more than 2,000 subscribers for the RealTime Platform.
The addition of a direct-connect trading capability in the Trading Platform will add more subscribers.
The introduction of the mobile eFinix system will add even more subscribers.
The higher priced Trader and eFinix programs will add proportionally to the income stream.
With scale, the Gross Margin will improve moving up from the start-up GM achievable.
A move to a more senior Exchange listing, will bring in new investors, helping with both exposure for the product, and with an immediate effect on the share price.
With a Trading link to one or more brokers, iFinix can start participating in a share of trading commissions.
A move to a PE closer to 50:1 (which is often associated with new products being sold) rather than the 20:1 from above (that is more usually associated with mature products and sales).
Some of the items in this "future list" could happen quite soon.
The above is VERY rough, but it is at least a reasoned reference calculation. Feel free to adjust the assumptions to suite your own experiences.
I have a general message board philosophy that recommends listening to everybody, but trusting nobody. This applies just as well to my posts as to any other post. Because this particular post describes a future (or even a potentially current) share price for INXR (certainly not my normal style), this post should go to the top of the “trust nobody” list. All I ask at this point, is that you think about the above, adjust the assumptions to fit your own understanding, and to revisit these ideas in the future when we have more information.
rjc
