<< but really do the numbers work like this (for real)in anyone's opinion?? >>
Absolutely. You must not have much business management experience.
Price negotiation considerations will include (but not be limited to) the future earnings forecast - going out up to 10 years in the future, market projections going out as long as the earnings forecast, debt-equity items and other financial statements, the facilities involved, patents, the number of engineers and R&D staff, inventory, the price/sales multiple recently paid for other similar companies, etc.
That last item is significant. Don't expect MRVC to sell for less than a fair price.
Today's stock price doesn't have much to do with this transaction. Oh, it helps if the market has assigned a fair valuation already, but in this case it hasn't.
<<Why would somebody pay $600 million to $1 billion for one piece of this company when they could go out an buy the whole dang thing from us today for $300 million and change?>>
They can't - for several reasons. Here are a few:
1) It would be hostile at anything less than a reasonable price - and we are nowhere near that.
2) You try buying 26 million shares on the open market at $12 per share or 13+ million for just a 51% controlling interest.
3) Companies are not bought and sold based exclusively (or even predomininantly) on market price. These are strategic moves - in business, short term is usually one year or less, tactical decisions go out 2-5 years, and strategic ones go out 10 years.
When ASND was in the dumps at $22 per share with a market cap between 2 and 2.5 billion, people couldn't imagine anyone paying even $6-7 billion for it. LU ended up paying $14 billion less than one year later. |
