OTCQB:VVCIF - Post by User
Comment by
Schaffhausenon Dec 05, 2020 7:58am
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Post# 32043457
RE:RE:RE:VIVO is an Instantly Accretive Takeover Target
RE:RE:RE:VIVO is an Instantly Accretive Takeover Target
A simple theory would be based on equivalent Market Cap/Revenue of the buying company. That is to say that since VIVO would be generally outperforming the potential buying LP cohort (considering VIVO turns profit in 2021, ahead of the potential buying company). The price of VIVO in a buyout would be justifiable at an earnings multiple at or slightly above that of the buying company. Say VIVO 2021 net revenue is estimated at 60M then, with a current market cap of $55M, VIVO would have a MC/revenue ratio of 0.92. Other LPS have varying ratios, MUCH HIGHER THAN VIVO, and for the large LPS, that ratio is as high as 27 for Canopy Growth! Now, having said that, Canopy is on the far end of the spectrum and its shares are grossly overvalued. In line with other mid-cap LPS I think a ratio of 3 is a steal of VIVO, putting the price at 0.55. Once VIVO profitability is reached I think that the ratio could be closer to 6, putting SP above 1.00 again and well away from the current opportunistic buyout status. Cheers, Schaff