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Cardica Inc. Message Board

  • lilpimpinmf lilpimpinmf Apr 25, 2013 2:03 PM Flag

    Why have the insiders

    bought into this stock like they have? Anyone know?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • andersongordon@ymail.com andersongordon Apr 25, 2013 6:54 PM Flag

      At a $1.06 a share, they are keeping from having their ownership diluted. They originally put up $~10 a share and have the knowledge of the market potential of this new stapler-cutter at ~1.5 Billion $/yr. Their original investment goes to zero if the stapler-cutter is not given a chance to be introduced. So for the price of a few hundred thousand they keep the company alive long enough to get through the testing and FDA approval process. Even if the company decides to merge or sell itself to someone else they should get $5-$10 a share minimum and ~$20-30 if there is a favorable marketing / alliance. If they can navigate all the way through the testing, regualtory approval, marketing and rollout,.....very big IFs....with Gross Margins of ~70% and net margins of ~20-25% and $1.5 Billion in revenue potential, a terminal P/E of 15-20 should yeild EPS of ~$7.50 times P/E of $112.50-$150 a share. There is a small ?25% chance this last scenario comes about, but there is also a 50% scenario that the merger option of $10 comes about and a 25% chance the company stock goes to $0.00. If you multiply each scenario times its payoff and add you get an expected payout of ~$30.
      Hope this helps.
      GSA

      Sentiment: Buy

 
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