Share Count Confusion: Dilution, Employee Options and Multiple Share Classes!
ฝัง
- เผยแพร่เมื่อ 25 มิ.ย. 2024
- Getting from aggregate equity value to value per share should be a simple exercise, where you divide total value by number of shares outstanding. That process gets complex when you expect your company to issue more shares in the future to cover operating/investing needs or to cover employee option exercises, and when different classes of shares have different voting rights. In this session, I use my Tesla valuation from June 2018 to illustrate how to incorporate these factors to get a per share value in an intrinsic valuation, while highlighting what I believe are bad practices in dealing with them.
Slides: www.stern.nyu.edu/~adamodar/pd...
Blog Post: bit.ly/2mIeFle
Spreadsheets:
1. Tesla Valuation: www.stern.nyu.edu/~adamodar/pc...
2. Tesla Dilution: www.stern.nyu.edu/~adamodar/pc...
Great stuff Professor, this issue is often ignored or simplified in textbooks leading to problems in practice.
Voting vs non-voting equity - eye opener, thank you as always for the great insights prof!
Thank you for the post. Very helpful!
Treasury stock method is used in m&a situations where options vest on change of control, so it does make sense when used appropriately
Great videos. I really find value in listening to your videos. Just finished a few chapters of your book "Little book".
Excellent!
Good ol' dilution
I will typically add the number of weighted avg. dilutive stock awards outstanding from the most recent quarterly period to the total shares outstanding as the denominator when determining intrinsic value per share. Unless share price has increased substantially from that report, this will yield approximately the same result as valuing total outstanding options using an option pricing model and subtracting that amount similar to outstanding debt.
Thank you for the clarification! Would love to see a valuation video on Helios and Matheson (owner of MoviePass)... they just did a 1 for 250 reverse stock split in order to stay listed.
thennekfox an anti-profit business model is worth zero
1. How much premium to be added if there are 3 classes. A with 1 vote per share, B with 10 votes per share and C with no votes (Example: Discovery Inc)? How does this change the equation you suggested to calculate the value?
2. I'm trying to learn how to calculate the value with classes of shares and found not much content on the internet. Thanks for uploading this. Just subscribed to your channel with this 1 video. :)
So you simply ignore unvested RSU? No dilution effects?
It is a matter of opinion I think, but if you're conservative they should be added to the share count as you would assume the vast majority will vest in the future. www.wallstreetprep.com/knowledge/stock-based-compensation-treatment-dcf-almost-always-wrong/#comment-318379
Damodaran concurs at 13:14
@@JonesDawg I agree with on that with Damodaran. I was interested in unvested RSU specifically, not options and not restricted stocks. So those that represent a promise for common shares upon vesting (e.g. Activision Blizzard). Unfortunately I have not found expert advice on this to quote in my paper. Considering the characteristic of the RSU I decided for now to add them to the share count, but only a portion as it might be limited by employees leaving the company, not meeting performance goals and the time value of the shares.
Есть здесь еще кто-нибудь из русских кто смотрит этот канал?
я
How do you adjust their value for multiple class action lawsuits, and SEC investigations, all due to their egomaniac man child CEO?