<<I am not using the percentage ownership of DRIV as a valuation measure for TSQD.>>
That's good
<<I am only using it in trying to come up with how may shares will be offered.>>
That's not so good.
<< And this is the part I dont really understand. TSQD gets 4.8 million shares of DRIV, regardless of the percentage that is of the total shares issued. Agreed!>>
Yes, we DO agree.
<< But, if we use what we know right now to be the percentage stake that TSQD has (23%) then can extrapolate from that to come up with the total shares that would be issued right now (4.8 million is 23% of 20.87 million).
I am with you. 4.8 mill is 23% of 20.87 mill. Estimated DRIV capitalization today, before IPO.
<<Now, if you look at IPOCentrals composite of the DRIV IPO it says that the total valuation is 40.3 million. Maybe I am misinterpreting this but if that means that the total value of the offering will be ~$40.3 m ...>>
Agreed. They want to raise $40 mill thru the sale of shares to the public. This could be only via newly issued shares, or they could include some shares held by insiders, too.
<...then we can take that number and divide it by the shares to be offered that we came up with above.>>
OOPS! Wrong turn! Why do you want to divide the estimated offering proceeds by the total shares that you estimated are ALREADY outstanding (or the 4.8 mill that could be issued upon exercise of TSQD's option). Stop. Back up, and try again.
How about this scenario: The underwriters think they can float the shares at $20.00 each. Desired proceeds: $40 mill, price per share, $20, number to be issued, 2 million.
New, post-offering, total DRIV capitalization:
New shares ...................2.00 million
Existing shares, (including
TSQD 4.8 mill option)........20.87 million
Total outstanding shares.....22.87 million
TSQD's percentage ownership or DRIV has dropped to 4.8/40.87 or roughly 21%.
But the market has established the value of each of the DRIV shares at $20.00.
TSQD has 20*4.8 mill, or $96 million worth of DRIV.
Add that to the fair value of TSQD's other business, and divide by the outstanding TSQD shares (wasn't it around 20 million?).
You get a number in the $7.00 to $9.00 range, as I recall.
If the IPO comes out at $10.00 per share, TSQD fair value will be lower by $2.40 or so. If it comes out at $40.00, add $4.80, etc....
Brian |
