Doubts - 1. Why haven't we delved into the revenue projections for Bs? To bake into the multiple valuation? Isn't that pretty standard. 2. Wouldn't we need to know more about John's existing media company, before presenting ideas?
@vipuljha97
10 ай бұрын
Thank you so much for doing this interesting M&A case! Just wanted to understand how did Vigram arrive at the revenue multiple for Birdshot? It does make sense to compare it with Company B, considering the kinda comparable user-base, but why 4X?
@jimmykhawand1315
10 ай бұрын
I don't understand why he estimated a valuation/user based on Company B. Isn't he supposed to then divide his total estimated valuation ($3.6B) by the number of users Birdshot has (150M)? This would then give $24/user , which is actually attractive?
@TripKs777
10 ай бұрын
The purpose of using a various valuation methods was to get a different angle view. He would not have achieved this if he continued using the $3.6B number onto the valuation/user based method
@cjack_25
10 ай бұрын
Incorrect. The valuation/user is a derived calculation that takes the provided valuation and divides it by the current user base. This normalizes per-user value across the comp set and is NOT a separate valuation methodology. Thus, the correct use of Valuation / User would be to take the 3.6B valuation using the revenue multiple and divide it by the user base for Birdshot, giving $24/user which offers a strong case that users on Birdshot monetize particularly well and drive significant value relative to the market. Not sure why the interviewer didn't interject on that point.
@TripKs777
10 ай бұрын
@@cjack_25The interviewer’s intent was to CROSSCHECK if Birdshot’s valuation of $3.6B is reasonable. So using competitor’s valuation/user ratio, he calculated backwards by applying it to Birdshot’s number of users thereby attaining a ‘new’ valuation number from a different angle. This is a common cross checking methodology that consultants use.
@sunnyvids5628
4 ай бұрын
the reason why he did not calculate valuation/ user using $3.6B is Because he said that he wants to check whether his estimated valuation is correct or not i.e $3.6 B. In order to do that he uses valuation/ user based approach by calculating the valuation per user using company B in which he assumes the valuation / user as same as company B i.e 10 $ and to calculate the valuation of the company he multiplies this 10$ by users of bird short i.e 150 M and valuation becomes 1.5 B which is around half of 3 billion $ asked by birdshot so which is why he does not considers birdshot as an attractive target
@ThePiston199
10 ай бұрын
Would've loved to extract more about what John thinks by asking a lot more questions. It was mostly a pessimistic view from the candidate before in-depth evaluation.
@SuyashSomani-m1w
21 күн бұрын
Not sure if validation step was appropriate (valuation/user* user), reason to that it misses out the fact that revenue/user is 3X of Birdshot compared company B.
@vitakalma1830
4 ай бұрын
If the valuation is 3,6 billion and the asking price is 3,0 billion, why is it not an interesting target? It seems to me the company is undervalued and therefore should be considered further
@HASHEMALALAWI-e3g
2 ай бұрын
He further validated the initial valuation approach of 3.6bn based on revenues multiple by using an alternative valuation approach (i.e. per user) which yields a value of 1.5 bn ($10 * 150mn users). Accordingly, we now have two valuation approaches (revenues and by user). hope this helps!!
@elvinimali706
29 күн бұрын
I thought there was a lot missing here. John has a net worth of 10bn, but we didn't explore how he would actually make that money available or structure the deal, nor on what timelines he would expect the company to return an investment for him
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