since we are fishing for a price,then as in the fishing industry you take 3yrs of estimated profit from the catch and thats the selling price of the permit or company.3 yrs of sales of the patch divided by the # of shares and thats my guess.Also I would throw in something for the technology aspect
The patch is going to be sold for $100 dollars. In a previous CC we heard that the patch will provide the company with 70% profit!
Lets say 1 million people use the patch once a week, that will cost $5200 per individual providing the company with a gross profit of $3640.00 Multiply that by a million people and you have $3,640,000,000.00 in Gross profits annually. Lets say 30% is retained after tax, operating costs, salary ETC. You now have $1,092,000,000.00 in net profits per year. Divide this number by 36 million shares outstanding and you have a PPS of about $30 per share.
For argument sake the bidding company will state these numbers look great, however there is no sales force, no production equipment, no warehouse for storage, and no current sales. They will probably drive the bid down 40% and offer a buy price of $18 per share.