Let’s examine the reality of edigs status
IP Business Strategy facts to date and other sources of revenue
A few facts and calculations:
We need much more than expectations of product sales and partnerships
6 Settlements totaling 10.1 million
Average per settlement = 1.68 million
Approximately 184 total infringers identified
Scenario 1
1.68 x 184 = 309 million
40% to DM = 124 million + expenses
60% to Edig = 185 million – expenses
Using a conservative expense estimate per suit of 250k x 184 = 46 million
Edig revenue 185 – DM expense of 46 = 139 million, represents the minimum amount if we win all 184 suits
What did RP mean when he stated “hundreds of millions of dollars?
Does that represent Total Revenue?
Does that represent revenue to Edig?
Scenario 2, based on 700 million
The language and financial reports suggest it’s total, therefore using 700 million total, x 60% = 420 million less DM expense of 46 minimum, the net equals 374 Million to Edig
If we go 5 years past 2010, two years since the initial filings, to resolve all 184, an optimistic time frame, we net on the average (420-10) 410 – 40+/- for expenses equals 370 / 5 = 74 million per year not including net present value of cash flow
At 280+ million shares, EPS = approx $.26,. Using a PE of 15, which the market would use some standard analysis for an ongoing multi year business, which calculates a share price of approximately $3.90
To generate the 700 million we need to average almost 4 million per settlement, some with larger amounts and some with very small amounts likely.
During this time the business value at mid point would be about 185 million, excluding past deficits and applicable taxes, and excluding future new revenues and unknown business opportunities. The per share value would be approximately $.66. At this point time, the net business value would be about $185 million as described above.
It is difficult to understand how one can realistically value the business at $10.00 per share, or about 3 billion, without any extra ordinary business strategies that cannot be counted on presently.
We have to first look at the facts, that is dealing with the IP strategy and evaluate the business worth and how that translates to per share value from a market viewpoint using standard market evaluation as they do with thousands of other companies.
Next we have to consider what opportunities may exist in the future and use an educated guess as to the added value and its impact on the share value.
