EBITDA is all i have ever used and is a fair way to compare across industries as well. 3 is common. 5 is reserved for companies where all is going just swimmingly.
On Wed, Apr 13, 2016, 12:41 PM CBB - Jay Fuller <par...@cyberbroadband.net> wrote: > > That is not the case here. Thanks for the insight. :) > > > ----- Original Message ----- > *From:* Chuck McCown <ch...@wbmfg.com> > *To:* af@afmug.com > > *Sent:* Wednesday, April 13, 2016 12:05 PM > *Subject:* Re: [AFMUG] shareholder value > > If I was interested at all, yes. But if I was a shareholder in a position > where his shares would give me controlling interest, then I may pay much > more. > > *From:* CBB - Jay Fuller <par...@cyberbroadband.net> > *Sent:* Wednesday, April 13, 2016 10:03 AM > *To:* af@afmug.com > *Subject:* Re: [AFMUG] shareholder value > > > so realistically a good place to start would be 3 x EBIDTA, x his > percentage of shares (18% i think), and that is probably the most you'd > offer ? > > ----- Original Message ----- > *From:* Chuck McCown <ch...@wbmfg.com> > *To:* af@afmug.com > *Sent:* Wednesday, April 13, 2016 10:40 AM > *Subject:* Re: [AFMUG] shareholder value > > 1.5 or 2x revenue has been around for as long as I can remember for any > company. But it is totally bogus. I suppose if you have net earnings of > 50% then 1.5 x revenue would be EBIDTA x 3. But how many businesses have a > net of 50%? Hopefully all of them but in reality most have far less. > > *From:* Josh Luthman <j...@imaginenetworksllc.com> > *Sent:* Wednesday, April 13, 2016 9:32 AM > *To:* af@afmug.com > *Subject:* Re: [AFMUG] shareholder value > > Everyone's always said 1.5x annual revenue around here. I don't know how > or why that started, but that answers your question. > > > Josh Luthman > Office: 937-552-2340 > Direct: 937-552-2343 > 1100 Wayne St > Suite 1337 > Troy, OH 45373 > > On Wed, Apr 13, 2016 at 11:23 AM, Travis Johnson <t...@ida.net> wrote: > >> 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. >> � >> � >> >> >> > >
