I concur with you. You can't use Price/Earnings Ratio to price a private company since the price is artificial and cant be relied upon. Hence multiples of sales approach and value of assets;-) Kiania D On Thu, Jan 12, 2012 at 6:26 PM, <ashok+skunkworks@parliaments.info> wrote:
On Wed, Jan 11, 2012 at 2:14 PM, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> wrote:
Now we are in my home ground company valuations:-
You purchase a company based on multiples of sales turnover. For companies with a defensible business model, customers, products etc you can do 3,4,5 multiples of turnover. Symphony is not, at most it should be 1.5 to 2 times multiples of sales.
Symphony turnover is no where near KES 3-4 Billion KES, which explains why KDN walked away from the negotiating table.
Actually this story claims the P/E ratio of the privately held symphony stock was in the teens :
presumably between 13 and 19.
for arguments sake lets say the PE was 15 which means altech is paying a premium of $15 on every buck that the share earns.
its privately held stock - so it is possible to manipulate the PE by manipulating the earnings since its merely an measure for accounting... so the 15 pe is only as good as the validity of the earnings figures underneath....
My two cents
Kiania D.
On Wed, Jan 11, 2012 at 1:57 PM, <ashok+skunkworks@parliaments.info> wrote:
On Wed, Jan 11, 2012 at 10:09 AM, David Kiania | Asentric Consulting Ltd <kianiadee@gmail.com> wrote:
Thanks Jared,
6 Billion is quite some amount, if it includes the properties on Waiyaki way then the valuation is valid but if it's servers boxes and employees? Doubt it.
its not just real-estate, servers and boxes -- they also have some intellectual property in terms of a hospital / healthcare management system (which they had themselves acquired via a buyout) , other things like the training division and some long term service contracts for mainframes and such ...
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