In understanding what has transpired, you need to look at the companies earnings per share?
Hang on, we don't have any! That's right, we are valuing the company on Expected future earnings growth per share.
September 2016, the board of directors went on a road show with great expectations of signing the companies first contract way before end of year. This expectation had investors buying in, the more the price went up, the more investors bought in. ( let it be know that as a long term investor, yours truely was severely handicapped like so many others, as I was building my rather large stake well and truely entrenched top 100).
Unfortunately, a few days ago, the company listed on there website an updated list of the Top 20 shareholders. This in my opinion was the last straw to burst open the major boil infestation on SMN outer skin.
Couple this with the investors expectations, based on T.C speech in August 2016, which was as bullish a speech you will ever hear, and the selling that took place by one of the greatest traders online roadshow ever witness live was beyond everyone's expectation. They will be writing books using this example for future traders creating wealth with odds clearly in your favour.
Now we know what was said and done, the pass is history, and we all need to move on to the next part of SMN story to unfold.
You cannot undo the pass, as the pass is history, but moving forward we can certainly look forward to SMN, putting in place the next hopefully successful outcome, by signing this elusiveness contract.
With Dennis Roach onboard, expect big things to happen in the future.
Now for the numbers.
Southwest Airlines have a fleet of approx 722 -737 planes. With one major safety check per aircraft every 18 months which takes up to 3 plus days at approximately $450,ooo minimum cost, SMN technology is going to save any major airlines lost revenue through maintenance downtime.
This is what was stated on the last conference call, that the first contract signed with a major operator, will be at a value of revenue to SMN as a yearly fee. This revenue fee could be in the vicinity of between $15 and $18 million to SMN.
If you take 722 planes /2 = 361 x $450,000 =$162,450,000 x 0.1 = $16 million rounded down
This is just one contract $16 million / 102,000,000 shares = 0.156 cents per share x 30 times per earnings = $4.70 expected value per share in the future on signing first contract with major operator.
There you have it, my take on what is going to happen, why it will happen, how you value the expect future earnings and share price.
This year is going to be pivot in SMN history.
The recent sell off will be long forgotten by the true loyal holders, the perennial holders, and the rest will be kicking themselves for the rest of their days. In the tropics we Call this "Goodnight Irene"
Good Luck
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