I’ve pulled together some hypothetical figures on the future price potential of PrefLogic. Bear with me and remember that all startups are a risk and can go to zero value.
PrefLogic are an SAAS (Software as a Service) company who want to empower individuals to create wealth the same way institutional firms have done for years via Wall Street.
Pref believe that they can sell thousands of STO Wizards (their proprietary software solution).
Let’s assume that Pref sell each wizard at $5,000. It’s worth acknowledging that similar STO Issuance Platforms sell their tokenization services at $50k – $100k each time a client wishes to tokenize their assets/business.
If Pref sell just 2,000 of their STO Wizards, this will net the company $10m in earnings… Bearing in mind the fact that there are 32 million home-based businesses in the US alone, I consider this 2,000 sales figure to be extremely conservative.
A Price to Earnings ratio is a means of calculating the potential market cap of a company based on the earnings-level of that same company. At a modest P/E ratio of 200:1 for a newly-profitable fintech company – as PrefLogic would be in the above scenario – Pref would be looking at a market cap of $2b with just 2,000 STO Wizards sold.
At the current Regulation S price of $1 per share, this market cap represents a 200x return-on-investment!
For comparison purposes, the following popular tech companies P/E rations are as follows:
- 1. GoDaddy (P/E ratio of 171)
- 2. Hubsspot (P/E/ ratio of 388)
- 3. Square inc (P/E ratio of 1052!)
If Preflogic capture just a tiny fraction of the $34t US real estate market, in such a scenario, with those earnings captured — plus add in the revenue streams of KYC/AML fees, Cap Table Management & Shareholder Notification Services, Investor Services fees and Affiliated Vendor Services — it’s my personal opinion that their P/E ratio could reach around 1000:1. This would represent a market cap of $10b and a 1000x RoI for investors in PrefLogic’s initial funding rounds.
The real estate market is another specific scenario where PrefLogic are superbly armed to thrive.
PrefLogic’s CEO, Chris Corica, has owned a successful real estate business for 18 years. Quite simply, Chris’ game is sales. Additionally, Pref’s founder, Todd Weir, has trained over 100 broker-dealers throughout his time on Wall Street.
With Chris and Todd’s expertise alone, the opportunity to land 10,000 sales of the STO Wizard seems absolutely achievable.
Equity Residential are one of the largest real estate companies in the US and are currently valued at $28b. They have a revenue flow of $2.5b and profits of $657m. They own almost 80,000 individual apartment units across the US alone. They are exactly the type of company who would benefit immensely by adopting PrefLogic’s STO Wizard to tokenize their property portfolio, fractionalizing ownership and utilising the resulting funds to expand their portfolio. If such a company were to tokenize just 10% of their assets, this would equate to 8,000 sales of the STO Wizard.
Remember that the above example is just one real estate company and that there are a total of 608,000 (six hundred and eight thousand) real estate agents in the US alone!
Add to the above that the existing US securities market amounts to approximately $30tr. The securities market is another field which is absolutely suited to tokenization and, in time, it seems certain that all securities will be digitized.
When the above is taken into account and all related figures are extrapolated; PrefLogic’s potential market cap is absolutely staggering!
If PrefLogic achieve their aims in even the most modest sense, they will undoubtedly be subject to attention by the giants in the real estate and fintech sectors. It would be wholly unsurprising if PrefLogic were to be bought-out by one of these existing companies… And remember, because PrefLogic are selling common stock (i.e. equity in the business itself), the sale of the business would provide a huge boost to the value of stocks and would be great news to Pref’s investors. This is a point which cannot be overstated – any takeover of Pref would give massive value to investors. This is something that cannot be said for investors in utility tokens which do not offer equity in a business.
As I’ve said, the above is purely hypothetical – and nothing is ever certain – but when compared to investing in speculative utility tokens; backing a company which brings true value to a massive market, and all on the basis of actual equity in the business itself, is a no brainer for me!
PrefLogic’s current Regulation S offering closes at the end of this month. This could be your last chance to become involved in something incredible at a basement-level price point!
*Edit: Included whitepaper listed revenue streams.