the valuation exercise

this is in response to a post by link, where he asked how US investors could possibly think of paying US$30 for 1 PRR ADR...

it's all psychology...

but everyone, help me with my maths..

1 Dendreon share = 1 Dendreon share

1 NASDAQ PRR ADR = 30 PRR Oz shares

now, post SPP (and forgeting about Options - i just want to make this easy), PRR will have approximately 965,219,000 shares on market - which will be shared between here and the US.

Dendreon has 145,823,501 shares on market (forgetting any Options)

so PRR will have 6.62 times more shares than Dendreon

Dendreon are currently priced at US$42.38

If Dendreon had the same number of shares issued as PRR, then with a market cap of US$6.18B, divide by 965,219,000, we arrive at a comparative US share price of US$6.40

so, if Dendreon had the same number of shares issued as PRR, then 1 Dendreon share would cost approximately US$6.40 (instead of the current US$42.38)

now a NASDAQ PRR ADR holds 30 PRR Oz shares. crucial point this one.

if (a very big IF i know, but just for this example only), IF PRR was at the same stage of development as Dendreon, then in order to equal the market cap of Dendreon, we get the following..

1 NASDAQ PRR ADR = 30 PRR Oz shares

at same theoretical MC

30 x US$6.40 = US$192.00

BUT

as we are not at the same stage of development as Dendreon, we can't skew the figures like this at all reasonably.

but it does look like we are going to list for approximately

1 NASDAQ PRR ADR = US$9.00

the exercise for all US investors is to ask: how does the development of PRR compare to where Dendreon is at?

asking that question helps US investors determine whether 1 ADR is worth US$9.00 or something towards my theoretical US$192.00

many missed the boat in the US with Dendreon, I am guessing those same many won't be wanting to miss another boat seemingly just like Dendreon namely, PRR

so i'm guessing US$9.00 will be a cinch for US investors.

i'm also thinking on a scale of US$9 to US$192, that US$30 is nothing, representing only 15% of a future target price on par with Dendreon's current MC value

do you see where i am coming from?

happy to take any suggestions for re-fudging my figures above


good luck