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swingbigbaby

11/18/09 10:18 AM

#2794 RE: mike306oh #2790

Regardless of how and what motivated someone to get in, there will definitely be those that do their DD and learn the enormous potential in KWBT and don't just flip it for a quick buck or two and stick around for the long haul. So with that in mind, I'm going to re-post something I wrote a few days ago here to give people a quick primer on the risk vs. reward as I see it for those who might be interested.

THE PROPER WAY TO VALUE KWBT.
Anyone, who sold their position of Kiwa following Q3 results clearly does not know how to value the stock...but then again the market does not either.

Kiwa will live or die with AF-01/1647. If it does not receive full governmental approval to manufacture and market these products on a much larger scale, then I doubt that the company will be able to exist much longer then another few years. If it does receive approval, then I would imagine they will be achieving annual sales +$100 million.

So if the stock does not receive approval it probably goes to absolute ZERO. If it does receive approval then it probably trades at +$0.25 or higher...0.25 would amount to a 1:1 price to sales ratio which is highly conservative.

So the proper way to value the stock essentially amounts to trying to handicap the chances of the stock actually obtaining approval....those chances are far greater then 1% but far lass then 100% as well. Clearly one can not look at the current pps and possibly claim that it fairly handicaps Kiwa's chance of obtaining approval as it was so artificially manipulated by NIR/Ribotsky. If one looks at Kiwa's management team as well as their joint ventures, contacts, etc I'd guess that Kiwa's realistic chances are about 40% or so.

That means, the way I look at it, Kiwa has a 40% chance of being worth .25 making fair value of .10. Even if I apply another conservative discount of 20% on top of that to account for the time value of money between now and when Kiwa does (assuming they do) obtain approval, then the shares would be at .08 fair value.

I'm not trying to suggest that Kiwa is risk-free...no stocks are and clearly penny-stocks contain more risk. But I sincerely do not think that the current pps comes anywhere close to properly value Kiwa's future potential. That potential does rely on governmental approval to manufacture and market AF-01 and 1647 on a larger scale. I have no doubt whatsoever that Kiwa would find it easy to secure financing on realistic and non-adversarial terms once obtaining approval. So once again, as the company's future is entirely reliant upon obtaining this approval...the proper way to value the company in it's current state is to handicap the company's chances of obtaining this approval.