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Black Diamond, Inc. Message Board

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  • bob_afet bob_afet May 17, 2010 11:36 AM Flag

    Deal terms

    I agree. That is why I focus on bits of information that indicate our fates are tied. One being that his payment to himself in clrs shares for Gregory are locked up for 2 years. Given that he valued them at $6 a share that would appear to be a pretty solid floor for this security... especially since WK has shown a history to look out for number 1 and in this case the lowest possible valuation accomplishes that.

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    • I agree with you, that is one good sign for future valuation. The problem is, I don't know how many other
      things are going on in their heads that digress from
      our best interests. The market, if there is one, seems to be putting very little value on this announcement and that is disappointing. Just my humble opinion.

      • 1 Reply to starcutspin
      • I think the market here is very uncertain about the margins. I made a rough DCF for this with 12.5% margins, 8% annual revenue growth, and a 15% required rate of return and I came up with a valuation of $5.89. Now what I do not take into account is LBO activity (ie leveraging up future cashflows for acquisitions to fully utilize NOLs). Now you pick up another 2.5% on margins valuation goes to $7.20 a share. I'm sure its difficult to take at facevalue when anyone talks about the output of their model but I suggest you run it out yourself and see where it comes out - point is market is not that far off given reasonable (although somewhat conservative) assumptions. I think everyone got in this early on thinking WK would leverage up massively to blow through the NOLs as fast as possible, we just are not seeing that here.

        Happy to share my model with ya if you are interested.

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