SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: redfish who wrote (32496)6/23/2005 5:26:39 AM
From: zonder  Read Replies (1) of 116555
 
Any significant decrease from CURRENT profitability of a company going public is a "significant issue".

As a potential investor, you take this year's expected earnings and look at the P/E of the IPO price with it, then say to yourself, "Hmm, 10x P/E is really cheap for such a high-growth company". If PartyGaming's profitability is going to decrease from 58% to 38% in five years (or possibly even in two years), such multiple comparisons are no longer valid. You need to look at DCF valuation, which will be SEVERELY affected by lower profitability in this near future.

Sorry but this is going to be my last post on this subject. You must have understood by now what I am trying to say.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News