Thanks,
I was working off NET revenue/earnings since the difference between Gross and Net in the scenario I expect/(as do RAP management)would be minimal. But erring on the side of caution, I worked on $5 a pop instead of $10, to compensate for overheads. I made the comparison with COH. COH's net revenue is 1/40th of it's market Cap. Its PE is roughly the same.
Yes you are technically right that earnings is different to net revenue in the sense that many companies re-invest earnings into market expansion, R&D etc rather than pay a dividend, but they often co-relate, and for the purposes of my post, I don't think it mattered. Even if I was 20% out in my calculations on margins blah blah, I think they make a simple point.
Obviously the higher the income, the lower the overheads and higher the margins. It is very much passive income once the mechanics are in place.
On another note, who here thinks that the Adult results run a risk of flopping?
I highly doubt it for the following reasons:
1) Already within the child trials (which achieved outstanding results) there was a lot of physiological diversity. It was done amongst Indonesian children, Australian/Caucasian children, fat kids, skinny kids, short kids, tall kids etc and no abnormalities presented themselves. For this reason I expect it is highly probable that the extra big kids (adults) will pass.
2) I can't believe that unofficial tests on adults hadn't been done prior to commencing official tests. They wouldn't have begun tests without having the app fine tuned... I see these trials purposed to satisfy mandatory regulatory requirement. (i.e. proof of x numbers of patients with x% success). I can't believe that RAP management are holding their breathe wondering if the results are going to pass.
3) I highly doubt Jett Capital would have coughed up the cash without some inkling of hope that this wasn't just a product that only worked for kids. Together with RAP, they are already thinking 5 steps or more ahead of the average investor. Officially, the CR was only open and filled within a couple hours or so. But don't tell me that Jett customers received the documentation, and a couple hours later they collectively cough up $10million. IMO that was just a formality and their due diligence would have been very thorough and possibly completed many weeks prior.
I am told that Jett was favoured not just because of the cash, but the quality of the cash i.e. they have connections to unlock a lot of doors... I am looking forward to many 'left field announcements' over the next few months.
Cheerio,
CT
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