Replies to post #18613 on eWorld Companies Inc (EWRC)

[blulotus]

this co is not making a million $$$ a month for that lame toolbar that does nothing,,, i tried it out it sucks.

[jimmenknee]

Interesting conversation I think well worth having fxchat-- thanks for introducing some numbers :-)

Let's talk valuation -vs- speculation.

With all due respect, what you have provided is typically used to help some determine a "speculative buy" target price not a company's value.

The thought is you take projected annualized revenue and give it a fair multiple. In this case a "fair multiplier" would be subjective, but let's even allow for a 4x ratio

O/S = 7,000,000,000
Sales annualized = 24,000,000
Sales per Share = 0.0034285714
PSR of 4 gives a speculative target price = 0.0137

So if you believe, after assessing the fundamentals that are needed to make the increased revenue to "$2 million per month" a reality, you can consider the "reward" side to risk using that number given the timeframe suggested. It's a little cloudy here but we can assume a hopeful 24 million annualized by EoY 2010. Risk then is weighed against reward fruition in December 2010.

FWIW current PSR based on reported numbers with allowance for all revenue considered trailing twelve months = approximately 290.

On the other hand, "valuation" is a trickier creature given the lack of existing fundamentals. Pretty much all you have to go on is a reported $124,883 in Current Assets and an Intangible Patent Application tied to the technology (Boomerang) that appears to be at the center of the "value." Please look up patent application 12/193,699 for the specifics on the technology ( http://portal.uspto.gov/external/portal/pair or http://tinyurl.com/24rr7f ).

The other "valuation" tool would be to use Market Cap given it is assumed to reflect what "shareholders" believe to be the value of the company. The problem with that approach in OTC companies is that the typical Institution/Mutual Fund associated pricing pressures to help keep the share price in check are absent. (I personally never use it for OTC company valuation purposes.)

But for the sake of discussion, a Market Cap utilizing the projected revenues and the current O/S places a future "value" at $96 million with a 4x PSR share price of 0.0145

So the logical head scratcher for me is: why are they willing to pay a 25% premium on company proforma today?

The only thing one can point to for that kind of risk capital is the technology-- no? If yes, then please look at the patent application as well as the actual Boomerang Media Player and let's continue the discussion on where that kind of value is seen cause I don't see it.