Per our earlier post, private equity anonyblogger Equity Private re-values GE based on Michael Idov's assumptions about how Daily Candy gets to a $100 million valuation**:
General Electric trailing twelve months of revenue: $144.4 billion.
GE market cap (April 24, 2006): $358.8 billion.
Control premium for acquisition of GE (2005 average): 30%
Optimism factor applied to control premium: 20%
Resulting control premium: 36%
Theoretical acquisition cost of GE with control premium: $487.9 billion.
Cost of restructuring GE to an "internet focused firm": 15% of enterprise value.
Restructuring time frame: 1 year.
Dollar cost of restructuring: $53.8 billion.
Total cost of GE acquisition and restructuring: $541.72 billion.
Potential sale price via "Idov Valuation Methodology" (patent pending): $1,444 trillion.
Gains from sale: $902.3 billion.
Time period: 1 year.
IRR on transaction: 66.56%
Cash on Cash: 1.67x
Our net worth went up just reading that.
**Idov asserts that "most companies" sell for 10x revenue. Incidentally, if that were the case, it would mean that New York mag was sold to Bruce Wasserstein at roughly 56%*** of market value.
***Then again, the more we think about the Lazard IPO, Wasserstein getting away with paying 56% of market for anything else would be par for the course.
Subjectively Objective [Going Private]