its pie time!, page-100

itsagas - can you tell us how they're going to get to these random share prices you keep spouting?

40c? thats 2000%. You've been telling us 800% till now.

Thats a market cap of approx. $400m. How are they going to justify that sort of price? Perhaps I could help?

This is the most up-beat assessment I can think of as to how things would need to go for PIE to get to 40c.

Per the week before christmas 09 in NZ (the best week for # of sessions due to the busy shopping preiod) they had on average 41 sessions per day per machine.

Assume each machine makes about $2 per session (its only 50c for local calls - which are included in the above, but we're being positive so we assume other sessions would cost more and boost the average cost). That makes about $80 per day per machine.

Now lets assume that only 1/2 the money they get will be for the use of the machines, the rest from advertising and branding etc. We will also go with a relatively high PE ratio as this will be considered a growth stock - say 20. Also, given the company is valued at $400m at this point in the future, you'd be paying overheads of at least $5m for staff and advertising, development etc.

So to get a $400m market cap, they need profit of $20m for a PE of 20. To do that, they need turnover of about $35m based on $5m overheads and 70% GPM (VERY high given the exposure to vandalism which even if we dont have to fix, means down time on the machines). Now we were assuming 1/2 ($17.5m) will come from the actual use of the machines.

If each machine is making $80 per day, thats $29,200 per year. So basically we just need 600 machines to get that.


As I said, this is way out there "BEST CASE" scenario with high margins, high use (based on the week before christmas usage in NZ), high PE valuation, low overheads etc.

Im not saying its impossible, but its kinda hard to see it all working out like that.

But at least I'm giving an example of how it might go down rather than spouting garbage posts and 1 liners like "800% on your money" without backing it up with anything on why it could be worth that.