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Re: stocky44 post# 6194

Monday, 04/05/2010 5:56:23 PM

Monday, April 05, 2010 5:56:23 PM

Post# of 41931
A very good question

My guess is that the stock could rise rather quickly but likely short of its true value. There are a lot of big unknowns such as:
- how many shares are o/s now and after the deal closes
- what is the nature of each deal
- what do the consolidated pro-forma statements look like

If I said that the group of companies brought in $ 200 million after three years, discount that to about $ 75 million now. Back out the minority interests (if any). So, if we say, the net is about $ 60 million, then, multiply the remainder by 2 or 3 for P/E of a pinkie.

The wild card is what debt and options are o/s when the deal gets done.

In the absence of any proven info, paying more than a dollar per stock is very high risk.

Now, add transparency in the deal details and financials and move to a higher exchange, then, the P/E rises.