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Sat 30th January 2010, 4:34pm
QUOTE(thekohser @ Sat 30th January 2010, 1:03pm)
Sometimes I "dumb things down" for consumption here on Wikipedia Review, because I've been told by some members that the business side of things can confuse them, but they trust me to evaluate whether some business proposition is (net) good or bad, or ethical or unethical. I will make mistakes because this is not my line of experience, either; and I am biased.
Fair enough - but whether because you were dumbing it down or because it isn't your field of expertise, there were
two errors in your post, and my apologies, but I felt it sensible to point them out. Well, the first one, at least - the profit margin thing was me just being a bit grouchy. As is my pointing out that you wouldn't sell an IPO through a market-maker, you'd sell it through an underwriter, and whilst the lead underwriter is almost always (in fact, always) subsequently the dominant market-maker, that's only post-IPO. But anyway.
I'm sorry I didn't try to get into EBITDA and cash flow and valuation for your consumption, Button.
No need to apologise - that stuff bores the shit out of me.
But, since you brought it up -- what would you guess Wikia, Inc.'s current valuation is, if the entire company and assets were sold to an interested buyer?
Whatever the interested buyer would be prepared to pay for it. That's all anything is worth.
Or, what might an IPO draw if 49% of the company were sold as common stock through a market maker? Please make sure your answer is clear enough to indicate whether or not that dollar amount is above or below $14,000,000, and try to justify your estimate with reasonable comparables. You clearly know more about this than me, so I'll be very interested in your response. Thanks!
How much information is a Delaware company obliged to file annually? And are filings available for public consumption? If, as you say and I suspect, the publically available information is limited, then you probably couldn't have gotten into the EBITDA or any valuation even if you'd wanted to.
If there is little to no publically available information then any estimate of Wikia's financial position, or a valuation on a sale or floatation, would be nothing more than guesswork - absent financials, none of the standard valuation models would work. It's a bit difficult to do a discounted cash flow valuation, or a multiple of turnover, or profit, if you don't know what the cash flow, turnover or profit are.
On top of that there would be so many variables inherent in an IPO itself (just to pick a few - timing - pricing six months from now will be very different to pricing six years from now - the country it floated in and exchange it floated on, who the underwriter(s) was/were, and so on...) that even if you had their last few years management accounts and audited P&L and balance sheet, coming up with a valuation on a floatation would still be nothing more than guesswork. Just a little more informed guesswork.
You could potentially come up with a figure that you could justify as being more on the estimate side of things than on the guesswork side of things if you were to use comparables, but there are still too many unknowns and variables. What marketplace would you be looking at? In the absence of financials, how would you determine which recent transactions in that marketplace involved companies of a similar size to Wikia? And so on.
Not a particularly interesting response (although I have this nagging feeling that you asked the question more for the asking than for the answering), but a truer one than any which were to profess "I think Wikia's worth $X...".