Topic: Here's how the Forbes guys royally screwed up their $822M Valuation (£515M)

[TheVoiceOfRiise]

Brilliant initial post, thanks. Possibly one of the most enlightening posts i've evr read on RAWK until...
you outdid yourself tho', they say you learn something new everyday. well. I hold my hands up and give you great thanks for introducing me to the word 'BOONDOGGLE'!

she's a beauty!!

[incredibleL4ever]

Class action against Forbes also.

This is just a news magazine article and holds no weight.

[RedBootsTommySmith]

The quality of the posts on RAWK never cease to amaze me.   With talent like Johnny C around, its amazing Share Liverpool hasn't had more traction.

[Koparoo]

Brilliant analysis Jonny. Thanks for putting in the time - and heading the lazy journo's off at the pass. Your analysis will now deservedly form the accepted wisdom...

Was also very interested in your assessments of FBR and Mill - as they are virtually unkown to the rest of us.

Posts like this are why I love RAWK.

[toomanysteves]

I am completely Boondogled by all of this.

But take a bow Johnny C!

[Surprise me.]

Is this how they value every company? If so then its all rubbish.

Thanks for the info too, brilliant post.

[leroy]

Top stuff Johnny cheers.

Have to say you break this shit down very simply for us plebs

[Johnny C]

Jonny - the other big number valuation was the $1bn that FBR Capital put on the club in September when Hicks was trying to con obtain finance from GSO. The same FBR that offered just £375m on October 4th. Any thoughts?

Alan_F & Koparoo mentioned the FBR valuation & bid....  and I just want to say 1 more thing about that...

So Hicks pays FBR to come up with some "independent" valuation that he feeds them.  Completely shady, but whatever...  Stuff like this unfortunately happens.

Hicks then says that he has paperwork that FBR Capital made a $600M bid (£375M) for LFC in October
He will try to prove in the Courts that FBR values the club @ $1Billion (£625M), but that they are going to try to pick-it-up-on-the-cheap @ $600M (£375M).  Okay, so you can see what Hicks is trying to do.  Clever, but clumsy.


Here's what he put in the Texas Court document:

• That $600M figure that he cites is from FBR
• That $1.03Billion figure that he cites is the "independent" valuation from FBR
• He paid FBR to come up with both of those figures

Like I said... "clumsy"


Just for the sake of it, let's see if FBR could realistically purchase Liverpool let alone make a credible offer
It turns out FBR is a public company.  HERE it is.  It's a $3 stock which is down 45% year-to-date.  The total valuation of the company is..... wait for it..... $212M (£130M).  Come on.  That supposed FBR bid is absolutely false.

[SamAteTheRedAcid]

Stupendous work this mate. Hope it gets to the right sources because you've done a sterling job blowing H&G out of the water there.

[Runehammer]

The quality of the posts on RAWK never cease to amaze me.   With talent like Johnny C around, its amazing Share Liverpool hasn't had more traction.

Yes indeed some of our American friends have been amazing and Johnny C's work is top notch, as for Share Liverpool, main stumbling block IMHO is/was the "entry level price" which was/is far beyond the means of most fans, due to the asking price.  With hindsight it perhaps could have been explored a bit better but I feel any criticism is harsh given the turmoil of the past few years where your average punter is absolutely shell-shocked by the circus surrounding us.

I recall someone posting that that ship had long sailed and fear (whoever it was - apologies for my senility here) they are probably right without a massive change in football's finances.

[sattapaartridge]

very interesting stuff johnny. keep it up & thanks.

[Johnny C]

This Forbes guy couldn't have worse timing...

Ozanian

His most recent article an hour ago

"Texas Court is Right About NESV's Liverpool Valuation Being Too Low"

(headshake)

[Afrodude]

This Forbes guy couldn't have worse timing...

Ozanian

His most recent article an hour ago

"Texas Court is Right About NESV's Liverpool Valuation Being Too Low"

(headshake)

[Brother Mouzone]

This Forbes guy couldn't have worse timing...

Ozanian

His most recent article an hour ago

"Texas Court is Right About NESV's Liverpool Valuation Being Too Low"

(headshake)

This is great for Forbes though as they have loads more subscribers now. Just so we can all leave comments for the cretin who wrote it. Quoting Johnny C's proper research!

[JP-65]

Still at it!

empireofthekop
 
RT @im1rob: RT @forbes "Texas Court Is Right About Liverpool Valuation Being Too Low" http://bit.ly/90Sfue

[Alan_X]

Go on Jonny - fire away:


http://blogs.forbes.com/mikeozanian/2010/10/14/texas-court-is-right-about-nesvs-liverpool-valuation-being-too-low/

[lourdes]

Brilliant stuff that........

[Cochise]

Great post.

[GinuWhine]

I'm printing this to keep it for my records. I haven't seen a clearer case of pure domination in my life lol

[Classic goal]

So they think it's worth £515m. Does this take into account the big fuck off £280m liability that is owed to rbs???

[horne]

Good question.

I think the first thing that we need to understand is that NONE of yesterday's/today's events are a surprise to LFC/RBS/Henry/Hicks/Mill etc...
Back in April when RBS refinanced the debt all these guys knew what this week was going to be like.  They all knew the steps that each other would take.

So understanding that, you can see that Hicks would need some ammo when it comes to claiming a higher valuation for the club.  So what does he do...?  He pays FBR a fee and tells them the multiple that he wants for the club (wink wink nod nod).  He then takes this "independent" valuation from FBR and goes to GSO, knowing full well that GSO are going to shoot him down.


The purpose of him going to GSO wasn't to get financing (he knew they'd never touch him now).
Rather the purpose of him going to GSO was simply to document for the various Courts that he had a meeting with $1B valuations (£625M) being thrown around.

Seriously think about that...  Think about what kind of character would do that.  This guy has been planning for these exact legal events for months and months and months.  This is one serious guy and absolutely not to be underestimated.


Anyway, regarding these "offers" & "valuations" that he's talking about.... I don't buy that BS at all.  None of them were real.
Specifically regarding FBR, they are a chop-shop when it comes to banking.  3rd-rate.  Sorry if I offended anyone who works there, but they are not the highest quality. (same with Mill Capital for what it's worth).  FBR don't have the transactional banking expertise in-house to put a proper multiple on LFC (let alone an actual "offer" to buy the club)


And as far as $1B valuation (£625M) goes...  Think for a second what that means.
Hicks purchased the club 3-and-a-half years ago for £219M.  Does anyone in their right mind think that during his reign that Liverpool FC has TRIPLED in value...?  That's just plain nuts.  There is no investor on earth who would believe that.  Heck, even Henry's £300M valuation is saying that Liverpool FC has increased in value 37% since Hicks bought the club.  I understand the Premiership TV broadcasting package has something to do with it, but even that 37% seems ludicrously high.

While there is no investor on earth who would believe that $1B valuation, there is on earth bankers who work for chop-shops who will take any fee.  That's FBR in this case.


For what it's worth, let's see what price-to-sales multiple a $1B valuation represents.

• Hicks bought the club in a feel good 2007 before any credit crunch @ a 1.8X price-to sales ratio
• Forbes' ridiculous $822M valuation represents a 2.7X price-to sales ratio
• To get to $1B, FBR is slapping a 3.3X price-to-sales ratio

So in 2007 Hicks valued LFC @ 1.8X.  Today in the middle of a world-wide recession FBR is suggesting that the multiple almost double to 3.3X.  That's insane.  When the economy gets worse multiples decrease.  They don't double.  Even Hicks himself just decreased the value of his SPAC by 25%.

Anyway, that's why I believe Hicks simply told FBR the value he wanted, they took the fee from him, and then put together an "independent" report & valuation on LFC.

Laughable.  Detestable.  But this is the guy we are dealing with.  He is a pro.  A Hall of Fame All-Star when it comes to litigation.


But the other thing to consider is that Broughton/Henry/RBS all saw this coming a mile away.  They are doing what they need to do.  There's no way they could have stopped Hicks from this course of events.  They are playing a great hand.  They just have to continue to match this crafty incredibly smart and incredibly hungry operator.

city and tottenham are around the 300 mill mark give or take a few....chelsea are in at the 600 mark according to them,but their squad is worth well more....the agrgument on values could go on and on and never agree....however the only true value in a given market that you cant argue against,is the value that someone is willing to pay in an open market and its been open for too long.

argue with that you big fat lying texas tw*@

[mactifosi]

He is now slagging off Liverpool fans basically calling us idiots blinded by hate and his valuation is correct.

http://blogs.forbes.com/mikeozanian/2010/10/14/liverpool-supporters-appear-blinded-by-animosity-for-hicks-and-gillett/

[SMD]

I've responded.

[El Diablos]

Johnny C I salute you

your 2 threads on Hick's SPAC IPO and the Forbes 'valuation' have been great reads, very informative. It takes a lot of reading on RAWK to get real valuable info and those 2 posts are terrific. I'm amazed that he got his SPAC II financed what with all the bad press he's been getting with LFC and the Rangers. Can you use your investigative skills to give an opinion on what Mill's next move is?

[ericthered10]

Just looked up this Mike Ozanian fella's profile for Forbes. He co-hosts a Forbes SportsMoney show for the YES Network. The New York Yankees regional TV network that is in direct competition with NESV and their NESN. Interesting?

[RJH]

He is now slagging off Liverpool fans basically calling us idiots blinded by hate and his valuation is correct.

http://blogs.forbes.com/mikeozanian/2010/10/14/liverpool-supporters-appear-blinded-by-animosity-for-hicks-and-gillett/

There was a piece earlier today, also defending their evaluation:
http://blogs.forbes.com/mikeozanian/2010/10/14/texas-court-is-right-about-nesvs-liverpool-valuation-being-too-low/

Doesn't make much of a job of it though.
The fact that the valuation has dropped by $150 million dollars in 6 months without a decrease in the average revenue (which is what they base the valuation on) just proves that the multiplication factor they use is essentially one they make up to suit what they think.

[RedMonko]

Well done! Terrific job there mate.

[John C]

Superb thread Johnny.

[duke8]

Still at it!

empireofthekop
 
RT @im1rob: RT @forbes "Texas Court Is Right About Liverpool Valuation Being Too Low" http://bit.ly/90Sfue

fantastic. when you read all these posts and replies your heart swells with pride... the world didnt know we had such clever fans and reels in shock. proud of you all. keep up the excellent work. 

[Gerrards Boxing Coach]

Alan_F & Koparoo mentioned the FBR valuation & bid....  and I just want to say 1 more thing about that...

So Hicks pays FBR to come up with some "independent" valuation that he feeds them.  Completely shady, but whatever...  Stuff like this unfortunately happens.

Hicks then says that he has paperwork that FBR Capital made a $600M bid (£375M) for LFC in October
He will try to prove in the Courts that FBR values the club @ $1Billion (£625M), but that they are going to try to pick-it-up-on-the-cheap @ $600M (£375M).  Okay, so you can see what Hicks is trying to do.  Clever, but clumsy.


Here's what he put in the Texas Court document:

• That $600M figure that he cites is from FBR
• That $1.03Billion figure that he cites is the "independent" valuation from FBR
• He paid FBR to come up with both of those figures

Like I said... "clumsy"


Just for the sake of it, let's see if FBR could realistically purchase Liverpool let alone make a credible offer
It turns out FBR is a public company.  HERE it is.  It's a $3 stock which is down 45% year-to-date.  The total valuation of the company is..... wait for it..... $212M (£130M).  Come on.  That supposed FBR bid is absolutely false.

This post was so money I literally laughed out loud.  Hicks's entire professional career seems to revolve around deceit and attempts at exploitation.

[Cribertinokes]

Hats off to you Johnny, brilliant post.

[Rococo]

Hats off to you Johnny, brilliant post.

[Ambrosia]

Hats off to you Johnny, brilliant post.

Seconded...(or is it thirded?)

[SMD]

Seconded...(or is it thirded?)

Seconded²

[Ambrosia]

All the maths geniuses are coming out of the woodwork 

[El Campeador]

Alan_F & Koparoo mentioned the FBR valuation & bid....  and I just want to say 1 more thing about that...

So Hicks pays FBR to come up with some "independent" valuation that he feeds them.  Completely shady, but whatever...  Stuff like this unfortunately happens.

Hicks then says that he has paperwork that FBR Capital made a $600M bid (£375M) for LFC in October
He will try to prove in the Courts that FBR values the club @ $1Billion (£625M), but that they are going to try to pick-it-up-on-the-cheap @ $600M (£375M).  Okay, so you can see what Hicks is trying to do.  Clever, but clumsy.


Here's what he put in the Texas Court document:

• That $600M figure that he cites is from FBR
• That $1.03Billion figure that he cites is the "independent" valuation from FBR
• He paid FBR to come up with both of those figures

Like I said... "clumsy"


Just for the sake of it, let's see if FBR could realistically purchase Liverpool let alone make a credible offer
It turns out FBR is a public company.  HERE it is.  It's a $3 stock which is down 45% year-to-date.  The total valuation of the company is..... wait for it..... $212M (£130M).  Come on.  That supposed FBR bid is absolutely false.

You're a fucking rock star.

[Superthing]

Johnny C/Wallstreet44, as others have said, well in lad, well in

[RJH]

Seconded²

That's fourthed, surely?

[SMD]

All the maths geniuses are coming out of the woodwork 

Genii

[redbyrdz]

Oh wow, saw this thread mentioned in some other thread, glad i read it! Fantastic work!