Quote:
Originally Posted by BobC
Chase,
Regarding your first point on valuation, most companies are usually valued at some agreed upon multiple of EBITDA, and EBITDA is generally based on GAAP. They had just purchased Collectors Universe only a little over a year ago, and obviously established a price, most likely using CU's EBITDA just prior to the sale, with maybe some possible adjustments for projections. In making that statement as to the current value, they probably took their most recent actual (or maybe even projected) EBITDA from the company's operations and multiplied that by the same multiple used for their actual purchase of the company. Based on that, they are likely talking about multiple times increases in net Earnings Before Income Taxes, Depreciation, and Amortization. Would make sense with the surge in submissions, accompanied by the huge price increases, they have experienced during the pandemic.
Also, don't forget the recent Gennamint acquisition as well. Don't know if they added that into this valuation as part of the overall company, or if they are keeping that separate.
To put it simply though, they are likely making a boatload of even more money right now than they were when it was still a public company.
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Hi Bob,
Not sure what the value is of Genamint but they have acquired multiple businesses like WATA and Golding Auctions to name two, that would add to gross revenue. Genamint, if it is being used, simply assists in speeding up daily operations, which presumably saves payroll and would increase net income and gross income. There is some value to having Genamint but not sure what that would be or how you would determine that.
They did raise fees and while people are still submitting I just do not think that would amount to THAT much of an increase in the value of the company. Subs had to be down once they suspended lower tier services. Turning 8 million of the 13 million of the backlog which existed at the time of acquisition into revenue certainly helps but that presumably was built into the valuation at the time CU was acquired.
From my vantage point (you would know much more about this than I would) and with of course much less financial disclosure as a private co it is hard to swallow the company is really worth 5x what it was.
Could you envision them taking the co public again today and getting a 4 bil valuation? I just don't see that they have done enough to justify that value. I am sure I am wrong though.