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ELEMENTS MLCX Grains Index TR ETN Message Board

  • netstockanalyst netstockanalyst May 11, 2005 11:38 AM Flag

    GRU fair value


    Final thoughts on value, if there is any to be found here.

    My estimates are as follows:
    GRU will generate 10% of ASKJ's RPQ. ASKJ RPQ is currently $45 per 1000 queries.
    So, 10% of that is $.0045 per query.
    Assuming GRU can ramp up to 2.5 million queries per day (currently 2 million queries), the annual queries will be 912,500,000.
    912,500,000 x $.0045 = $4,106,250 in revenues.
    ASKJ P/S = 7, and, although not deserving at the moment if you were to assign the same P/S as an almost 1st tier search company like Jeeves, you would get the following:
    $4,106,250 divided by 8,200,000 shares outstanding, which equals 50 cents per share in revenues.
    50 cents x 7(P/S multiple) = $3.5 per share
    A realistic current value for GRU stock, and not far from the $5 IPO price.

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