Market Value

Today I've set out to understand the value the market is applying to the post-merged company.

If today's price is taken as the markets believe of what the combined company is valued at, then it is valuing the company at $18,620,123 (3103353867 x $0.006).


On face value this appears to be a very conservative estimate for the combined group. Is the market applying a higher risk that the merger wont go a head? To answer this question we'd have to know the operating revenue of the two.

I saw one article mention that Anywhere group alone is set to have revenues of $50m this year. I saw another artical that mentioned combined revenue $76m - which appears right, since $50m plus projected $26m for shopply seems about right - although i think shoply down graded their FY revenue to $19.

The article also suggests that the combined group is going to have $2m EBITDA. However a previous article suggested the Anwywhere Group with revenue of $50m will have $2m EBIDTA. So it looks like the $2 is for Anywhere and not the combined group.

So i think it's safe to say combined revenue for the post merger group is likely to be $69m with something inbetween 0-2m EBITDA. TBH i'm not sure how the losses of shoply will affect the overall group.

Here are some possible EBIDTA multiples for the current market capitalisation:
$2m - 9
$1m - 18
$0.5m - 36

So it appears the market might be expecting an EBITDA for the combined group between $0.5 and $1

Is it reasonable that the SHPs losses will be restricted to the pre-merged entity? I think given the experience of the Anyware managers, those losses are set to slide and increased profitability will be the result in FY17.

I was thinking of selling, but i now think it is prudent to hold, because whilst we are all expecting performance to be average FY16, i think the combined group can turn it around for FY17. We should know by December how significant this turn around is going to be.