Well, SIRI is an overvalued, overbloated pig, but I did buy XMSR at $3 based on my then valuation method that put eventual (2010) cashflows to afford dividends that would make the stock have a $50 value.
MCI went from pennies to mega dollars as it grew in the company's ability to pay dividends grew. Instead they chose to reinvest and grow their future ability to pay even higher dividends.
It all comes down to dividends - or the theoretical ability to pay them from future cashflows - otherwise it's an overvalued pig. And companies buying out another need to understand that and not think that somehow growth companies defy the basic laws of logic.
Time Warner thought like you did when they acquired AOL and learned the hard way.
To make it simpler to comprehend for those unfamiliar with the Finance 101 course, replace the word "dividends" with "earnings" since a company can, at least in theory and freqeuntly enough in reality, pay those earnings as dividends if they chose. You understand the PE ratio, I assume, and the even more important PEG ratio, the G standing for growth....so this should be easy to comprehend.
With SIRI, the market gives it a price tag based on its perceived future earnings, which I call "its ability to pay dividends," at some point in the future. I think the market is wrong, but that's irrelevant as to why it trades where it does.
In short, a stock's worth is most certainly only caculatable by its dividend value....with the exceptions being buyouts or break-up values as those are two other methods of a company potentially being able to pay back shareholders in cash. Otherwise, it's all bullshit and it will catch up with itself. MCI-Worldcom is a perfect example of that.
TRDY I can see in a few years eaning possibly .02/share (2.29 mil net a Q)...which in theory it can pay out in dividends. Using an 5% yield, it puts the potential target at .40/share.
Raw
AI
Market Data 
Markets 
