Pellegrino 1-2-wheeeeI was around the day Pellegrino One came out. In fact that was the day I bought my first shares in Opel. In fact that was the day I first got into depth research regarding any stock I had ever owned to that point. A good lesson for sure.
I went back and reread the old NR and in doing so it kind of stoked quite a number of questions regarding the upcoming P2 and what it may tell us. First off the evaluation uses a couple of different methods with the most prevalent being
Monte Carlo simulation techniques.
https://en.wikipedia.org/wiki/Monte_Carlo_method Secondly they use a variety of shoulda coulda woulda's to cover most contingencies along with conservative and agressive versions of the valuation. So as broad based as P1 is I expect P2 will be much more refined in terms of intrinsics and etailed data. On the flip side we wont be privy to that as its going to be heavily redacted.
Now as technology has evolved, I am expecting so has their methods and systems in doing the evaluations. As each milestone was completed it probably changed or altered the metrics substantially. So as in P1.............
Pellegrino & Associates developed a risk-adjusted discount rate to discount forecast future free cash flows to determine a nominal value indication as of the appraisal's effective date. Will they use this or a more accurate guestimate of future potentiate cash flows ?
More on the Monte Carlo technique.....
To account for the uncertainty inherent in the valuation process, Pellegrino & Associates captured the complex model interactions in the face of uncertain estimating assumptions using Monte Carlo simulation techniques. This did not constrain the valuation model to any single value predictions of key values such as royalty rates or costs So again, "if" this method is used on P2, what can we expect ? So I did some research into the algorithym itself. Examples and risks etc.
In addition to these and other methods, the use of Monte Carlo simulations in conjunction with the Income Approach provides the valuation analyst with a flexible, powerful tool for performing valuations of early stage, technology-based IP assets. Given the nature of Monte Carlo simulations, they are particularly useful when the valuation is being performed to support transactions or strategic decision-making. - See more at: https://www.srr.com/article/using-monte-carlo-method-value-early-stage-technology-based-intellectual-property-assets#sthash.EMMmRU9X.dpuf
https://www.srr.com/article/using-monte-carlo-method-value-early-stage-technology-based-intellectual-property-assets In addition to these and other methods, the use of Monte Carlo simulations in conjunction with the Income Approach provides the valuation analyst with a flexible, powerful tool for performing valuations of early stage, technology-based IP assets. Given the nature of Monte Carlo simulations, they are particularly useful when the valuation is being performed to support transactions or strategic decision-making. - See more at: https://www.srr.com/article/using-monte-carlo-method-value-early-stage-technology-based-intellectual-property-assets#sthash.EMMmRU9X.dpuf
In addition to these and other methods, the use of Monte Carlo simulations in conjunction with the Income Approach provides the valuation analyst with a flexible, powerful tool for performing valuations of early stage, technology-based IP assets. Given the nature of Monte Carlo simulations, they are particularly useful when the valuation is being performed to support transactions or strategic decision-making. - See more at: https://www.srr.com/article/using-monte-carlo-method-value-early-stage-technology-based-intellectual-property-assets#sthash.EMMmRU9X.dpuf
In addition to these and other methods, the use of Monte Carlo simulations in conjunction with the Income Approach provides the valuation analyst with a flexible, powerful tool for performing valuations of early stage, technology-based IP assets. Given the nature of Monte Carlo simulations, they are particularly useful when the valuation is being performed to support transactions or strategic decision-making. - See more at: https://www.srr.com/article/using-monte-carlo-method-value-early-stage-technology-based-intellectual-property-assets#sthash.EMMmRU9X.dpuf
A good read here.....
https://www.iphandbook.org/handbook/ch09/p03/ Smart phone vertical market top for Samsung.....(they will be needing us soon)
https://www.ft.com/cms/s/0/9a72d8be-06a1-11e4-8c0e-00144feab7de.html#axzz38avEf0fl What does all this tell us ? Depending again on what method(s) were used, what future earnings models they used and what they thought was a growing vertical and a stagnant vertical (really needing the POET technology to grow or even survive). It could mean entry into this very exclusive club soon enough.....
https://www.crn.com/slide-shows/channel-programs/240155650/the-worlds-20-most-valuable-technology-brands.htm/pgno/0/20 In the meantime, theres every argument that P2 will come in well above 10 billion and as I personally expect...... closer to 15 billion. As a few have said, this is a base line evaluation designed to give a starting point. The delays tell me that the valuation is signiifcant and everyone from the company lawyers to the exchnage will have or be vetting every word carefully. For corporate security purposes, heavily redacted for sure.
So at somewhere around a baseline of
$60 a share, we will have the abilty to measure that number in conjunction with quarterly earnings numbers. Then applying a very nice PE multiple after several quarters into the companies earnings infancy.
Beat me to death if you wish.......whether you like it or believe it ....or not this company is going to turn the technology world on its ear. As did Apple, and in doing so will generate horrendous numbers and dollars. Like Apple, only at a much faster rate, its destined in the next couple of years to hit
$500 a share plus, the management knows it. Ajit would not waste his momentous resume on a speculative situation. would not have come from a Fortune 500 company to a TSX-V start up for anything less than a world class chnce at success. He would not have come to an unproven technology, he would not have come for a $2 stock. He would not have come for a listing on the TSX. He would not have come for anything less than his name in the history books. Hes here because he knows the future for POET. He's here because its a new generation and no one else has it but POET. He leads us to nirvana..........
I will be right there with him.