Hi,
I'm not sure where you got the 1.5 times revenue number. Every single
company I have invested or purchased is based on their EBIDTA number,
not revenue. Generally I am around the 3x annual EBIDTA.
Travis
On 4/13/2016 9:14 AM, CBB - Jay Fuller wrote:
Good morning -
Today we received notice at least one of our shareholders wishes to
share his stock.
We have another shareholder who is the widow of one of our founding
members who also should probably be considering selling - although she
is not really thinking about it. We do not know any of her relatives
(nephew?) who would likely be the heir to her stock. Her age is
currently 81 I believe.
I know the "ongoing" value for a company is generally 1.5 times annual
revenue, but the true value of what a company is worth is what someone
is actually willing to pay for the stock.
Per our bylaws, the company has 30 days to make an offer before the
stockholder hits the general market.
What advice can you give as to what kind of offer the company should give?
The stockholder likely does not know what the "market rate" is and
very likely the market rate is not the same here in the deep south.
I am also curious as to what your thoughts may be on how the
stockholder may try to sell his stock on the open market. I feel sure
it would not consist of a classified ad in the local paper. :)
Thanks in advance.
