Time for a bit of creative good news for you hapless ATM shareholders.
Let's redo these market success probabilities as follows:
Chance of success in Australia: 100%
Chance of success in United Kingdom: 85%
Chance of Success in China: 85%
Chance of Success in USA: 75%
Value of ATM should rollout to USA succeed in the future: $1.24
Risk adjusted today value for grand plan corporate roll out for ATM in the United Staes to succeed:
$1.24 x 1.00 x 0.85 x 0.85 x 0.72 = 52c
PT asked what I meant by 'succeed'. Each stage in the marketing plan must generate enough cash to fund the next stage. (this assumes no further capital raising by the company). Australia has 'succeeded' because it already generates enough cash to fuel the expansions mostly into the UK. The UK does not (yet) generate the cash to expand into the USA. My model assumes that Australia will continue to fund growth in Australia and the UK even when the UK starts generating surplus cash. That UK surplus cash will be sent off the United States to fund expansion there.
China is interesting because anecdotally some of the sales made in Australia are shipped off to China. It is not clear to me how many new direct China sales are incremental sales or just substitutes for goods that used to be bought in Australia. But I am assuming in my model that China must eventually 'succeed' in its own right to continue the global expansion plan.
So this calculation shows that ATM is indeed worth the current market price! Those probabilities do show that much of the forward success is already built into the share price at 52c though. Any weakness in cash generated from here could see the share price plummet as the need for a capital raising becomes urgent. I can't really understand why ATM management don't do it now ( aka Xero ) rather than taking the company to the brink like this. I can only assume it is because the existing large shareholders would not support a capital raising now. That could prove a costly misjudgement for all shareholders later.
SNOOPY