{"id":827,"date":"2020-05-08T11:48:30","date_gmt":"2020-05-08T11:48:30","guid":{"rendered":"https:\/\/new.deschenaux.me\/?p=827"},"modified":"2021-02-13T10:22:24","modified_gmt":"2021-02-13T10:22:24","slug":"restoring-ipo-value-creation","status":"publish","type":"post","link":"https:\/\/masterspac.com\/fr\/master-spac-advantages\/restoring-ipo-value-creation\/","title":{"rendered":"Restoring the IPO Value Creation"},"content":{"rendered":"
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<\/p>\n

Many do not understand the reasons why the Initial Public Offering of a share of common stock (also known as “IPO “) increases the financial valuation of the stock issuing company ?<\/p>\n

The value creation of an IPO arises mainly from the difference of valuations between the private and public markets.<\/p>\n

The Private Market values the Assets. Thus, a bakery that has a turnover of $ 1 million and a profit of $ 100,000 will be sold at approximately $ 1 million. About $ 800,000 during recession and perhaps $ 1,3 million if the market is booming.<\/p>\n

In this valuation model, there is no anticipation, everything is based on the past, on the intrinsic value.<\/p>\n

The Public Market values the Anticipation. It is based on the equivalent interest rate. In a simplistic form, excluding risk factors for explanation purposes, if the capital market interest rate is 2% and the bakery generates 10%, it will be valued by the public market at least five times its price.<\/p>\n

Thus, our bakery with a $ 1 million turnover would be sold at about $ 7 million, i.e. taking into account an Anticipation on 15 years of turnover. About $ 5 million during recession, with a 10 years anticipation, and perhaps $ 10 million if the market is booming with a 20 years anticipation.<\/p>\n

<\/p>\n

In this valuation model, the anticipation is predominant and the intrinsic value is negligible<\/p>\n

In a regular SPAC this value creation does not exist, so this IPO advantage is lost because a merger or an acquisition does not trigger a change of market valuation model. With the Master SPAC, it is restored as the acquisition mode is the financing of an IPO as defined in this article<\/a> by Marc Ren\u00e9 Deschenaux<\/a>.<\/p>\n

<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

Many do not understand the reasons why the Initial Public Offering of a share of common stock (also known as “IPO “) increases the financial valuation of the stock issuing company ? The value creation of an IPO arises mainly from the difference of valuations between the private and public markets. The Private Market values the Assets. … Lire la suite<\/a><\/p>","protected":false},"author":1,"featured_media":3169,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wds_primary_category":13,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-master-spac-advantages"],"_links":{"self":[{"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/posts\/827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/comments?post=827"}],"version-history":[{"count":0,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/posts\/827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/media\/3169"}],"wp:attachment":[{"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/media?parent=827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/categories?post=827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/masterspac.com\/fr\/wp-json\/wp\/v2\/tags?post=827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}