Because Wall Street usually gives book values based on X10, 20 or 30 multiples. I did not make that rule up.....Wall Street did. That's the way the market works. Depending on the sectors and what they are doing....those 3 multiples are usually used to determin the value of a stock. I know this is the pink sheets but I believe the rule still applies. Many major brokers use these multiples in deciding what stocks are undervalued. That's why revenue increase is so important quarterly. Even if the profits stay the same but revenues drop...it makes the book value drop even though the profits stayed the same. I used to work for Merril Lynch as a intern when I was obtaining my MBA in finance. They always used this method. It's been years since I have worked for a broker so things may have changed slightly but I don't think it has much. Some brokers may use a different method and different multiples but x10 has always been a conservative number. So yes DKGR is worth .038 book value so far and any other revenues that they obtain as long as they don't dilute shares it will increase its value.
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