SPOOZ Inc (SPZI)

[Gbathat]

buying more spzi vs buying 141

thanks for the reminder gmenfan! I meant to put some numbers together for this...

Okay, let's pretend I have 10 grand to invest in spzi or 141 right now (how I wish that were true!). Hmmm, how to decide...

First, I need to make a whole bunch of assumptions.

1. Spzi owns 33% of the 141 o/s (a slightly conservative assumption based on Allie's estimate from her dd).

2. 141 projects that it will make 10 mil in net profit in its first year

3. Any increase in value of 141 shares can be translated as revenue for spzi because they own 120 million shares


Scenario 1: I buy 1,000,000 shares of spzi with my 10 grand (at the current bargain price of a penny per share)

In the not so distant future, 141 goes public with an estimated o/s of 360 million shares- thus, based on assumption 2, the earnings per share would be .027, and with P/E of 10, would give a $0.27 per share (that would be sweet!!). This is a high share price, and it will be set initially by the private investors' valuation of the company (edited: and the negotiating between them and 141- either way, the market should shortly reflect the value of the company after it goes public).

In this situation, spooz would get revs from 7% of SWARM net profits (~ $1 mil, since 141 would net 10 mil, though I don't know what the profit margin will be for 141), plus $0.27 times 120,000,000 shares = $32,000,000.

$33 mil revs for spzi, divided by 1.5 bil o/s, multiplied by a profit margin of 0.8 and a P/E of 10 (both estimates), yields a pps increase for spzi of $0.176... that would be sweet.

So my 10 g's invested in spzi would give me $166,000- just based on 141 associated revenues.

Now the key question is- can the increasing 141 share value be considered sustainable revenue, thus truly impacting the valuation of spzi shares. I say yes, because I believe 141's revenues will continue to grow by the very nature of the business. As their capital to trade increases, their revenues will increase.

Okay, SCENARIO #2-

I hold my 10 g's until 141 shares are available for public purchase. What will the 141 share price be at that point? I think it will already reflect the 141 revenue projections and associated valuation of the company by private investors who get the first crack at the shares. Based on assumption #2, this could be $0.27 cents, but let's say the private investors get a heck of a deal and are willing to sell shares for 1/10th of that price, thus enabling me to buy 400,000 shares.

If the 141 pps shoots up to $0.27 right away, then I make $97,200. However, I think this scenario is very unlikely. 141 is not going to sell for such a low price to private investors, and even if they did, the private investors would likely not sell for such a low price based on their own valuations of the company.

So for me, the answer is to buy spzi. Especially since this comparison only considered spzi's 141-associated revenues.
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Now someone responded to one of my previous posts that playing spzi in the short term makes sense since the 141 share price will add considerably to spzi value in the short term. However, I think 141 will continue to grow at a high rate for a long time, and if the share structure stays in tact, which it should since they'll probably be profiting out of the gate, it will enhance spzi value tremendously.


all my opinions on a very complicated topic, and any logical criticism is encouraged for the benefit of the board.

i am not a financial expert, or anything close, so do not base your investment decisions on my opinions and assumptions.

good luck to all.

gbathat