There were 4,300,000 births in the US in 2007. Let's conservatively assume that SQNM handles merely 500,000 T21 test annually in the future and charges $1,500 for each test. The cost of a test is about $500, more or less, and that leaves $1,000 as the net profit, then the total net profit will be $500m. And assume that the outstanding shares will be fully diluted to 150m shares, then the net income would be $3.3/share annually. For a PE of 20, pps will be 20x$3.3=$66.
Yes, SQNM will be $66/share a few years later.
Correct me if my asumptions and calculations are wrong.
Don't worry, the dilution is within my calculation in my pps prediction. This news only means that a good news is coming that would pop this stock to teens or even higher and then the management could do the dilution to meet the company's later financial needs, such as validating and marketing the T21 test.
Be long and strong as usual. Again, this stock should be trading in teens right now, not single digits.
First of all, I don't think the number of shares will be diluted to 150M, most likely to 120M.
Second, how about international market?
Third, howe about other tests.
Based on my calculation, it should reach to $120 three years later
What pps should be trading now?
Let's again conservatively take merely 50% of chance for DS test to be validated. Then $66x50%=$33, and take a 20% deduction for each year before this test is being commercilized, and assume it will take two more years.
pps should be trading around: $33x60%=$19.80
Yes, SQNM should be trading at $20/share right now. And again, this is a conservative prediction and calculation since the future pps could be much higher.