Ringing The Bell... sort of, page-126

@zaidi675 ,

When I invest, I do so on the basis of having a decent feel for the underlying earnings base of a business.

Sometimes, however, things are so fluid for a company that it is very hard to know where that earnings base sits.

Given the events of this year, and specifically the manner in which the core business is deteriorating, I view ISD to be such a case.

And in those situations, it is impossible to form an investment view, either way.

But one thing that has become quite clear over recent months is the motivation for buying King Content: it was done to offset the decline that was already starting to be seen in ISD's core businesses back then. And when capital is deployed for the wrong reasons - which it clearly was in the case of the King Content acquisition - then the results are almost never positive. As we have subsequently seen.

There is sure to be some residual value in ISD's businesses.
It's just that I can't determine with sufficient certainty what that residual value is.

I'm sorry I can't be more definitive, but that's just the nature of the beast: unless they are offered at very low multiples (as in, 2 or 3 times), valuing declining cash flow streams is not easy.