We have been asked our view of the valuation of Plus SMS (NZX:PLS). As there are no public financial forecasts we can’t place any sort of valuation on the company. We need to understand the cash flows at some level to complete some robust valuation work.
We are however amazed at the current market capitalisation of NZ$55.4 million, with reasonable trading volumes on NZAX (regularly over 500,000 shares traded daily this month) – with the negative information that has been released.
We also agree with Rod Drury’s comments (http://www.drury.net.nz/2006/09/10/plussms-wheres-the-investigative-journalism/) that there are big moral questions around founders taking money off the table pre-revenues.