Bitcoin Volatility: Evidence of Market Maturity After Cryptocurrency Bubble

Since the inception of Bitcoin and the concept of ‘digital assets’, institutional and retail investors kept their distance (and rightfully so) given the extreme volatility in prices, uncertainty around regulation, and questions around consumer adoption. Not only was the concept of Bitcoin foreign, but potential opportunities surrounding the digital currency and its underlying technology [...]

By |2018-11-06T15:08:11+00:00November 3rd, 2018|Blockchain, Valuation|Comments Off on Bitcoin Volatility: Evidence of Market Maturity After Cryptocurrency Bubble

Can the Goodwill Rate of Return be Equal to the WACC?

By: David Turney, CFA Intrinsic has performed hundreds of purchase price allocations over the past few years and, usually, the rate of return assigned to goodwill is the highest among the assets in the weighted average return on assets (WARA) analysis. However, this idea can be challenged in certain situations. This post is not [...]

By |2018-11-04T20:44:49+00:00October 24th, 2018|Financial, Valuation|Comments Off on Can the Goodwill Rate of Return be Equal to the WACC?

Policy & Procedures Checklist for Private Equity Investments in the Blockchain Industry

By Daniyal Inamullah, CFA Overview After the recent collapse of the cryptocurrency bubble, the appetite for institutional capital in the blockchain industry is still low, but there is an intensified focus on corporate governance, legal structure, and project teams. Investors looking to structure deals in the space need to implement appropriate methodologies for valuation [...]

By |2018-11-06T15:08:48+00:00October 24th, 2018|Acquisitions, Blockchain, Private Equity, Valuation|Comments Off on Policy & Procedures Checklist for Private Equity Investments in the Blockchain Industry

Publicly Traded Blockchain Companies: Understanding Risk for a New Market

By: Daniyal Inamullah, CFA Without the advantage of being part of a reputable VC or Angel group, or actively working on early-stage company investments, public market information offers retail investors with the best knowledge to invest in micro and small cap companies. Due to the asymmetric information and profit potential associated with any new [...]

By |2018-11-06T15:09:20+00:00October 15th, 2018|Acquisitions, Blockchain, Financial, Presentations, Select Articles, Valuation|Comments Off on Publicly Traded Blockchain Companies: Understanding Risk for a New Market

Fair Market Value to Fair Value reconciliation in Machinery and Equipment Appraisals

Fair Market Value (“FMV”) is a proposed opinion of value of an asset, supported by sound research and generally accepted valuation methods, that could be received in the market. Whereas Fair Value (“FV”) is the realized value of a piece of equipment upon the actual sale of an asset. In Machinery and Equipment appraisals (“M&E”), [...]

By |2018-09-19T10:44:25+00:00September 19th, 2018|Acquisitions, Financial, Select Articles, Valuation|Comments Off on Fair Market Value to Fair Value reconciliation in Machinery and Equipment Appraisals

Valuation of Complex Securities

Intrinsic has assisted many publicly traded (and privately-owned) clients over the years in the valuation of complex securities for financial reporting purposes under GAAP and IFRS regulations. “Complex Securities” in this context refers to variations of warrants, convertible debt, restricted stock units (“RSU”) and performance shares based around a total shareholder return (“TSR”) mechanism. In [...]

By |2018-08-15T11:50:33+00:00August 15th, 2018|Featured, Select Articles, Valuation|Comments Off on Valuation of Complex Securities

Fair Value Discounts to Equity Consideration in a Controlling Acquisition

Application of Discounts to the Fair Value of Rollover Equity A question Intrinsic often fields in completing valuations for financial reporting involving a controlling transaction is whether it is appropriate to apply discounts for lack of control (DLOC) or discounts for lack of marketability (DLOM) to rollover equity granted to the sellers. We find that [...]

By |2018-07-18T16:28:18+00:00July 18th, 2018|Financial, Valuation|Comments Off on Fair Value Discounts to Equity Consideration in a Controlling Acquisition

Impact of the new ASC 606 revenue recognition standard on software company deals

While adoption of the new principle-based revenue standards (ASC 606 and IFRS 15, Revenue from Contracts with Customers) is old news for public companies who were required to conform with the standard starting January 2018, many private companies have not yet considered the impact the new standard will have on their revenue recognition nor created [...]

By |2018-06-20T18:46:41+00:00June 19th, 2018|Financial, Governments, Valuation|Comments Off on Impact of the new ASC 606 revenue recognition standard on software company deals

From 35% to 21% – Yes, the tax cuts made your company more valuable.*

In May, I had the opportunity to attend the annual Fair Value Conference organized by the American Society of Appraisers (ASA) in Los Angeles. As one may expect, a hot topic at the conference was the impact of the Tax Cuts and Jobs Act (TCJA) signed into law by the Trump Administration on December 22nd [...]

By |2018-06-20T18:42:31+00:00June 7th, 2018|Financial, Governments, Taxes, Valuation|Comments Off on From 35% to 21% – Yes, the tax cuts made your company more valuable.*

Flexibility in Startup Valuation

At times, valuation projects can be straight forward; other times, not so much. Accepted valuation methodologies are well-developed in an academic and theoretical sense, but the real-world application often gets messy. This sentiment is perfectly explained by every valuation professional’s favorite quote: “Valuing a business is part art and part science.” -Warren Buffet As technology [...]

By |2018-05-22T18:56:15+00:00May 22nd, 2018|Select Articles, Valuation|Comments Off on Flexibility in Startup Valuation