How to Analyze a 10K: Bear Stearns example Hi,
I just had a concept in the Bear Stearns example in the “How to Analyze a 10K” module that I would like clarification on.
From my understanding, Bear Stearns’ footnotes described that there were around 100MM outstanding shares of common stock, but within its footnotes they had describ...Hi,
I just had a concept in the Bear Stearns example in the “How to Analyze a 10K” module that I would like clarification on.
From my understanding, Bear Stearns’ footnotes described that there were around 100MM outstanding shares of common stock, but within its footnotes they had described the additional dilutive effect of restricted shares for employees (~50MM more shares). These shares (issued to employees) have not been issued yet, and should have been included in the numerator for the valuation multiple (I’m assuming that when Mr. Lin talks about the “numerator” in the valuation multiple, he is referring to enterprise value).
I’m confused about why the additional employee restricted shares would affect the numerator. Is this because these shares would have increased equity value and hence enterprise value in the numerator? Not accounting for additional shares -> lower equity value -> lower enterprise value -> lower valuation multiple? Is my thinking correct here?Read More
Hi, I just had a concept in the Bear Stearns example in the “How to Analyze a 10K” module that I would like clarification on. From my understanding, Bear Stearns’ footnotes described that there were around 100MM outstanding shares of common stock, but within its footnotes they had describ... Hi,
I just had a concept in the Bear Stearns example in the “How to Analyze a 10K” module that I would like clarification on.
From my understanding, Bear Stearns’ footnotes described that there were around 100MM outstanding shares of common stock, but within its footnotes they had described the additional dilutive effect of restricted shares for employees (~50MM more shares). These shares (issued to employees) have not been issued yet, and should have been included in the numerator for the valuation multiple (I’m assuming that when Mr. Lin talks about the “numerator” in the valuation multiple, he is referring to enterprise value).
I’m confused about why the additional employee restricted shares would affect the numerator. Is this because these shares would have increased equity value and hence enterprise value in the numerator? Not accounting for additional shares -> lower equity value -> lower enterprise value -> lower valuation multiple? Is my thinking correct here? Read More