Not much more than a year ago, shares in Baltimore Technologies were freely available for less than £1.50 sterling (€2.38). Twelve months later, explosive gains by Baltimore has meant that anybody wanting to buy the company's shares will have to pay around £70 (€88) each.
The technophiles among us will state that Baltimore's current valuation of more than £2.5 billion is perfectly justified given its strong position - stronger since this week's $150 million acquisition of CyberTrust in the e-commerce market. E-commerce is expected to burgeon in the years ahead, triggering exponential demand for Baltimore's encryption software, the argument goes.
The technophobes, on the other hand, look at the likes of Baltimore and its stratospheric share price, hold their heads in horror and take the view that Internet and e-commerce stocks are the next bubble waiting to burst.
Current Account would never profess to know an awful lot about techie stocks, but is prepared to believe that the likes of Intel must know what they are doing when it ploughs money into stocks like Baltimore.
Intel has made a bundle of money from its 6 per cent stake in Baltimore and seems perfectly happy to sit tight on its investment with no sign that the chipmaker is feeling the need to take a profit.
So to the latest takeover that the market is raving about. By any standards Baltimore boss Fran Rooney, seems to have pulled a stroke - buying CyberTrust, a company with half Baltimore's turnover, for less than 5 per cent of its own market capitalisation. Baltimore shareholders are suffering little dilution and that dilution will end up being negligible if the share price keeps rising.
On this side of the pond, allshare takeovers are usually based on a five- or 10-day average of the takeover company's share before the deal is first announced. But the cost of Baltimore's takeover will be based on the 10-day average immediately before the deal closes in mid-March. If the share price stays strong, that's good for Baltimore shareholders because of lower dilution, but bad for CyberTrust shareholders - and vice versa.
Doing well out of the deal are CyberTrust's staff who will get about 1.4 million Baltimore share options. That compares with the 1.3 million Baltimore shares that CyberTrust's own shareholders will get if the eventual price for the shares is the same as the current price in the market. Not a bad deal.
Given the killing he made last November when he sold two million Baltimore shares and the even bigger killing he has made on his Esat Digifone shares in the past year, most people might find it difficult to feel sorry for Dermot Desmond's paper loss on those two million shares he sold.
At the current Baltimore price, Mr Desmond has foregone about £96 million sterling by selling those two million shares at somewhere between £20 and £22. Add that to the 155,000 Baltimore shares he sold last March for just £6.45 each and the paper losses mount. Still, Mr Desmond held on to 1.3 million Baltimore shares after he sold last November and these have trebled in value since November to more than £90 million.
