Are you saying you can't see any circumstances under which this stock could hit $40 dollars? I'm am not predicting $40 by the way, just saying that it would be possible given the right revenue and earnings numbers. What would the stock price be if this company was driving revenues of $1billion per year? Of course that won't happen this year or next. That would be a longer term result of biOasis bringing many conjugates to the market. Isn't that what they think they can do? If not, why would anyone want to buy them? In fact, if someone were to ante up $10 then the potential would have to be a whole lot bigger than that or why take the risk? Why not just wait until they prove themselves and then make the $10 offer? That's a rhetorical question by the way.
Now, 40 cents (even lower) is a very real possibility if these guys fail to produce the goods. And if there is any sense of that failure, this thing will hit $0.40 so fast you’ll slip on your own doo-doo as you run to the terminal to place your sell order (not you of course since you don’t own any given your prediction of $0.40). It will be ugly – and maybe smelly – for sure. But one deal will validate the technology and send this stock much higher. Two deals could get this thing really going. A good story and solid revenue growth can do wonders for a stock. Don’t believe me, then check out the returns on gold and silver streaming companies. Check out SLW and SSL (Toronto) for starters. Simply incredible long term annual returns.
If it takes BTI 10 years to get to $40 from here, then you would get approximately a 37% compounded annual return. So the question should be, can BTI produce enough products in the next ten years to drive revenue sufficient to justify a $40 stock price? If the technology works, my guess is that they can. If not, then no.
What would BTI’s market cap be at $40? It would be $1.52 billion based on current shares outstanding. I guess on a multiple of revenue basis, that would be $380 million for 4x revenue or $304 million for 5x revenue or $152 million for 10x revenue. I don’t know what multiple the market will give on the successful application of their technology, but it will be better than $0.40 and better than the current $1.70.
So now that I have explained why I think $40 is possible, could you please explain why you think this stock is going to $0.40. I welcome opposing viewpoints.