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Re: drifterfcrc post# 122487

Tuesday, 04/21/2009 12:07:30 PM

Tuesday, April 21, 2009 12:07:30 PM

Post# of 192567
.10+ is the value (potential) of the company after it has been developed, not the value of the company today (obviously, based on pps). A buyout is for the potential value, because the buyer thinks he can get EVEN MORE out of the company in the future if he buys it now.

To buy a company, the buyer has to offer an amount that is a tradeoff between the potential value of the future minus the cost, time, and effort it will take to get it there. Thus, the buyout price is not the true potential value of the company, and it also isn't today's value of the company.

Though people do buy stocks for their potential, they don't buy it at that price but rather they buy the stock at today's valuation plus potential minus risk. It's the risk that keeps the stock down, and EESO does have risks involved.

(Just trying to back you up, oneinamillion and drifter.)

May your trading develop your character as well as your portfolio.