ValuationModelApplicationInternetCompanyValuation文件材料.ppt

The market uses a range of valuation techniques, both bottom-up and top-down.;Each technique brings inherent strengths and weaknesses which are biased toward certain situations. ;Example : DCF estimated market value for E*Trade;=;The real options valuation model is relatively new and used to incorporate the benefit and uncertainty of future business opportunities into the overall valuation.;E*Trade’s valuation is particularly high using this technique due to its volatile estimated future cash flows.;The market value / addressable market multiple estimates market value in comparison with a similar company.;Source: (1) /p/d/twe.html as of May 25, 2000 Notes: (2) Merrill Lynch Estimates, AC Analysis. Note in this case the addressable market for E*Trade is the same as that of the comparable company, TD Waterhouse. (3) The market factor is 100% throughout the examples because TD Waterhouse and E*Trade are going after the same market. If they were not, and the market of the comparable company was more attractive, the market factor would be larger than 100%. (4) The company factor takes into account the relative differences between both companies such as size, stage of development, customer base, brand and eCommerce experience (will always be 75% throughout the examples).;The Market value / sales (revenues) ratios are the most widely used valuation tool for eCommerce and Internet opportunities because the data is usually available and reasonably accurate.;Market analysts often use a high level estimate based on customer lifetime value to ‘sanity check’ more rigorous calculations and test if current share prices are justifiable.;We can use the example of E*trade to illustrate how this valuation approach works.;Appendix: Internet company valuation techniques;Although commonly used, price multiple valuations have been criticized as inaccurate valuation measures. ;Two valuation approaches, discounted cash flow and real option analysis, have support for explaining high I