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Nautilus Inc. Message Board

  • yahoo yahoo May 12, 2005 5:38 AM Flag

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    • aplz_to_aplz_dust_to_dust aplz_to_aplz_dust_to_dust Jul 12, 2003 10:05 PM Flag

      woops, I did the math wrong at the bottom. My calculator tells me the net present value per share should be

      10%*$0 + 40%*7 + 40%*27 + 10%*40
      = 0 + $2.80 + $10.80 + $4
      = $17.60.

      Close enough to my earlier $16.80 but I've checked this more carefully.

      I'm surprised that the estimate is coming out so high. I'd expect it to come out closer to recent prices. But $17.60 seems to lie in a kind of no-man's land in between the "pre-October" and "post-October" price ranges.

    • aplz_to_aplz_dust_to_dust aplz_to_aplz_dust_to_dust Jul 12, 2003 9:55 PM Flag

      Maybe it was an error, astral, but your "gloom & doom" case crept up to $10. Just for variety, let's put my 6.5% discounted values back in for the "G" and "E" cases.

      I've also toned down the probabilities on "D" and "W", and docked "W"'s value to account for my 6.5% risk-free discount rate.

      "D": value $0
      probability 10%

      "G": value $7
      probability 40%

      "E": value $27
      probability 40%

      "W": value $40
      probability 10%

      Total net present value = 10%*$0 + 40%*$7 + 40%*$27 + 10%*$40 = $16.80

      Well, it's a far cry from $60, but not much like $0 either. This is an interesting problem.

    • Sorry, I can't accept that zero liquidation value is a highly likely outcome. What you've got there is:
      "D" a disastrous, no-liquidation-value case,
      "G" a liquidation value case, and
      "E" a stay-in-business case.

      While each outcome might be possible, I think you could be more inclusive. How about we add a "Wow" case:

      "D": value $0
      probability 25%

      "G": value $10
      probability 25%

      "E": value $36
      probability 25%

      "W": value $50
      probability 25%

      Total: 25%*($0 + $10 + $36 + $50) = $96/4 = $24 intrinsic value per share

      I think that $0 and $60 are less likely than $10 and $36, but any of the outcomes is possible. This pretty much covers the range of what I've seen posted here.

    • aplz_to_aplz_dust_to_dust aplz_to_aplz_dust_to_dust Jul 12, 2003 3:03 PM Flag

      Well, maybe so. The "negotiation" concept really does appeal to me. But I think you're being way too aggressive pushing your own set of numbers.

    • I think that my original scenarios capture your "D" case just fine:

      If you want to include a little for individuals with exotic opinions like $0 intrinsic value, give 'em 5% off the "G" case.

      "G": (business fails & goes into liquidation)
      $5 per share intrinsic value.
      45% probability

      "D": $0 (bizarre, unlikely case. executives go to Brazil with all the cash & trademarks in a briefcase.)
      5% probability

      "E": (repeat of three-trailing-years)
      $36 per share intrinsic value.
      50% probability

      total: 45%*$5 + 5%*$0 + 50%*$36 = $19.75.

      That I can live with.

    • wtf? How do you get 33% probability that the company collapses with zero liquidation value? I just don't see it, even the fucking Nordic Track sold for $8 million, even AFTER CML's economic collapse. PLUS there's NLS's cash money.

      Maybe 5% probability for the "D" scenario, or maybe give it a reasonable liquidation value.
      Present book value is about $7. Take about $5 non-cash equity, lose 40% of that ($2) in liquidation, and add in the present $2 of cash. That brings the "D" scenario (why 'D'??) to $5, a far cry from your half-assed $0 number.

    • aplz_to_aplz_dust_to_dust aplz_to_aplz_dust_to_dust Jul 12, 2003 10:21 AM Flag

      Au contraire, my hydra-headed friend. The post looks quite sensible to me. I'd much rather see wrangling over the numbers in (or of) some set of well-defined cases ("scenarios"?) than continued personal disputes and ex-cathedra pronouncements.

      I don't care (and can't easily guess) whether each poster is personally credible or not. Just let him post something I can understand and evaluate.

20.00-0.45(-2.20%)Oct 21 4:02 PMEDT