World Surveillance Group Inc (fka WSGI)

[DeepBlue1]

rtb...I was trying to compose a message earlier that was basically about T/A being almost useless for the time being, and that we've moved to N/A, or "New Analysis" for now.

So my "prediction" was really more just gut instinct. However, a lot of longs, AND shorts voted on Friday, and the consensus was that this is a HUGE development for GTE.

And there's a reason why we stopped at $4, and that IS based on the charts. IMO, what happened was that...everyone realized very quickly that this Russian WiMax deal is HUGE, but they were caught by surprise and couldn't digest it completely in the space of a few hours, so we naturally returned to the psychological barrier at $4.

Now we have to give it a more quantitative value as best we can.

Fundamentally speaking, this one deal will not just add to yearly revenues but rather MULTIPLY yearly revenues. In fact, this one contract is worth much much more than the entire market capitalization of GTE as it stands now.

So what is a reasonable multiple of yearly revs per share on a company in what many consider to be the fastest growing thing in communications? Namely WiMax.

If a market cap of 2X revs is reasonable, and many scholarly types think it is VERY reasonable for a company experiencing this type of growth, with roughly 81 million shares and $380 million in revs (including the predicted run rate on the other revs already in place), the multiple of 2X revs gives GTE a Very reasonable market cap of roughly $760 million.

Divided by the roughly 81 million shares, it can reasonably be expected that the pps will be well over $8 in time, that is assuming that no other deals take place any time soon.

Of course revs isn't the only metric to be considered, but it's a good start. Profitability is another one to be considered too of course, but with only 81 million shares, it would only take making a profit of say 5% on those revs of $760 million to reach a profit of $38 million...roughly .50 per share.

Now what multiple would you put on that? A PE of 10 would be $5.00 and 20 would be $10.00 per share.

For all these reasons and more, I firmly believe that when the psychological barriers of $4, and then the old highs of $5.00+ are broken, we'll be able to move on to a "reasonable valuation" in the $8+ range.

Can't say how long it'll take cuz it will undoubtedly be manipulated/attacked by naysayers etc, and also new deals will be struck along the way.

All I know is that I intend to play it to the hilt and for all it's worth based on my best instincts, but even if some of you aren't traders and decide to just hold on tight, I seriously doubt that you'll be disappointed by this time next year.

GLTA, no matter how you play it. And Happy New Year to all of you lucky enough to even be aware of GTE while it's still "undervalued".

:?D