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Simulations Plus, Inc. Message Board

  • garmingchan garmingchan Apr 3, 2008 11:36 PM Flag

    Unit Cost

    IS there a fixed unit cost to each license? Or is that negotiated between the players involved?

    "The client also issued a purchase order for additional software licenses at several of its research sites, which expands the number of users in their existing global multi-year software license agreement that began in December 2007."

    "Additional" means nothing on its own. However "Several of its research sites" means more than 2.

    How much can this potentially add to its bottom line? Or do we have to wait for the conference call?


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    • I'm not talking about Walt, he already owns too much as it is and does need to stay diversified. Mainly talking about Creeley or Dahlen, especially Creeley. If they were to buy, I would take that as very positive.
      I doubt the company will buy back shares itself. They want that cash available for acquisitions. This business is still in it's infancy and growing fast, there are much better ways to use the money than buying it's own stock.
      I'm not holding my breath though either for insider buys, they are restricted from doing anything too close to any sort of acquisition or material event. If the prospects look too good for SLP as it is, Walt would just take the company private and keep that revenue stream for himself. He's obviously looking to grow through acquisitions to become a much larger company and then get the big payday from a large company buying them out. But he's been very smart and reasonable about how he's bought assets previously, so I trust him to continue making good decisions. For the time-being, I see that as way out on the horizon, company will need to become a blip on the radar before that ever happens.

    • Rooster,

      Insiders *personally* would not want to repurchase shares, unless they are completely fearless risk-takers (which, gladly, they are not). Not that anything is wrong with the stock but common sense dictates that they need some diversification.

      I was thinking more of the company itself repurchasing shares (taking them out of the float) with some of the extra piles of cash they have lying around for the acquisition.


    • Your oxygen mask has failed. Abort! Abort!

    • Yeah. They already own 1/2 of it. The could possibly get in now and out at 5 or so and that would be a good return..but as good as it is when we see them buy at also hurts to see them sell at 5. They have to report all transactions and the street usually doesn't like seeing insiders sell.

    • It all depends on what the return on your equity will be.
      If they see the stock price going up to 4. They can have a return of almost 66%. That's a pretty good return on any investment, and we're not talking about a specific timeline either. If they see it happening in less than a year, then why not? Then your annual rate of return is much higher (if you find similar investments).
      If they don't see their price advancing, then there's no reason to jump in.
      However, if your entire networth is basically 50% of the float, that's also a sign of dedication/faith.


    • Why would insiders buy more shares when they already own half the float??

    • The key words appear to be licenses and several both of which are plural so the order was obviously for more than one license. Because these were added only a few months after a new multiyear global license was signed I take that as a sign of very high confidence in the product by one of the biggest companies in the world. The big drug companies are all having cutbacks but they know they need to use the best tools if they're going to do more work with fewer people.

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