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Non-Tech : Berkeley Technology Limited (BLKYY) -- Ignore unavailable to you. Want to Upgrade?

To: architect* who wrote (530)	8/24/2000 8:37:29 PM
From: J. Conley	Read Replies (2) \| Respond to of 955

John, In one of the reports (3/7/2000) the analyst at FBR valued LDP on revenue based valuations like that of ICGE and CMGI. Applying a much lower multiple to LDP’s 1999 VC revenue than the multiple used for ICGE or CMGI she came up with a >$650.00 target (split-adjusted $162), which prompted the comment "seems a bit lofty now doesn't it." I have no idea what that number would be if using this year's revenue numbers. Well, I suppose somewhere in between the current price target of $42 and whatever that number would be is fine with me. <g> Seriously though, in some ways the current valuation of LDP can appear a little silly. There are many ways to view this, but consider the following regarding valuation of just one piece of the overall company: LDP is not spinning off its VC unit, but if they were valuing the unit for sale would they sell it based on the current value of the private equity holdings? Simply stated, would it be valued and sold for the $150-160 million or more in current private equity (or a simple assessment of what the $150-160 million might be worth in the market by applying a multiple)? And if they did, wouldn't this be akin to valuing and selling an extremely profitable business for the cost of its inventory, or for what you think you can sell the present inventory? ....."Nice job everyone, great business, now pack up your things and go home." Consider that through their talent, contacts, and deal-making ability developed over the years, this division of the company has recently made as much money as the market cap of LDP as a whole (and in the process avoided the B2C space in its entirety.) How long would it take LDP to make as much money in just the insurance or financial services business? I know the market discounts, but it does not seem all that rational to me to say the VC unit is worth just the value of private equity, or even a multiple of the value of the current investments for that matter. Is it worth anything as a going concern? Guess the market currently says no. And though I can think of an argument one might make to defend such a position, I really don't see why it would be considered sufficiently valid, for IMO in the real world the VC unit has some "enterprise value."