« on: October 09, 2006, 09:29:47 AM »
My estimates related to future earnings were derived by using the 80 20 rule and assuming: (1) the top 20% of the 300 companies that represent 80% of potential earnings to PTSCE have been and are being worked first, (2) the license agreements don’t include ongoing royalty payments, and (3) the average future earnings per licensed company will be about the same as the past average earnings per licensed company.
Estimating with these assumptions suggests the stock will begin to flounder in the $3 to $6 range (maybe $8 with investor exuberance). Upside is much greater if management properly uses the windfall licensing profits. Down side is $.00 if a patent litigation is lost or a patent work-around is discovered (in my view very unlikely).
Most estimates are wrong. Many estimates are useful for rough sizing.
Be realistic and enjoy the ride.