4DS - Anything but Charting, page-23096

4DS HC Tribes: Crystal ball

In the last 6 or so weeks, there has been a separation of forum members into distinct tribes based on expectations for the 4DS end game. We have 25c #/Desu at one end of the spectrum & the 4 Dollar per share tribe at the other. Hundreds of posts & no one changing tribes. Concurrently everyone could be right or wrong as the future is unknown. 4DS is either going to be sold / commercial transaction (success) or it will be liquidated (failure).

I seem to remember being taught at uni that the value of an investment is a function of discounted future cash flows. No matter your tribe, the sharemarket today valued each share at 8.6c or the equivalent of receiving approx AUS129m cash (1.5b shares + options). What reconciles the outcome for each tribe is the probability of success vs failure.

Estimating the likelihood of success vs failure (aka risk) is not normally analyzed/discussed on HC beyond terms like "highly speculative". So I thought I would have a crack at trying to quantify it for each tribe using a simplified model.

Here is my crystal ball - no discounting, 1.5 billion shares. only 2 possible outcomes, share price today based on expected future cash flows.

4DSHC Tribes - success vs failure crystal ball
Shares Issued + Options		1,500,000,000
Current Share Price		$0.086
Current Enterprise Value (AUD million)		$129
Liquidation Enterprise Value(AUD million)		$30
Liquidation Value (Per Share)		$0.02
			Implied Probability based on current share price
4DS HC Tribe	Sale (after bonus) - AUD million	Share Price Equivelent	Success = sale	Failure = liqudation
# Desu Fan Club	375	$0.25	29%	71%
Sale Bonus Poolers	600	$0.40	17%	83%
"Must be at least a billion"	1000	$0.67	10%	90%
$ per sharers -" JD's biggest deal ever!"	1500	$1.00	7%	93%
	2250	$1.50	4%	96%
	3000	$2.00	3%	97%
Company called 4DS for a reason - Howie wink wink	6000	$4.00	2%	98%

As you would expect, the sale price has an inverse relationship to the probability of success. Even # only has a 29% chance of getting his 25c - perhaps Desu is just a risk-averse guy. If you are planning on buying a yacht to cruise to the $4/share after-party on Jasp's island, then you have a 1 in 50 chance of living the dream.

Sobering stuff.


"What a crock".... no hard feelings:

Your reaction to my crystal ball might be to dismiss it as a crock of sh#t.

The easiest argument would be that today's share price does not accurately reflect the "true" value of 4DS. After all, ASX investors (except me ) don't understand tech, it did hit 28c & was 13c less than a month ago. I don't disagree, though I do chuckle when historic price levels are considered rational and the current share price is not.

What I would suggest is doing the calculation to determine what the current share price should be based on your expected sale price & probability of success. The formula would be :

(($ success) X (% success-) + ($ failure ) X (% failure)) / 1.5 billion shares.

If it comes out significantly higher than the current share price then you should be backing up the truck - especially before the next batch of chips comes out of IMEC's oven. If you are not comfortable telling your wife your expected % for failure then maybe preparing to sell pre results announcement would help you sleep at night.


DYOR - only intended to prompt thinking. Looking forward to tribes uniting once more.

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