He never said they were worth 80-100 million dollars.
Jonathan Sym, CEO of The Evermedia Group and STS Evermedia Corporation. "Since last year, STS's revenues have experienced significant growth. They have won key contracts and task orders as well as joining several teams with Fortune 1000 companies. I think by the end of 2010, STS can possibly exceed $10,000,000 in revenues."
And then made a qualified statement that he thought they could be worth that much. I would guess they dug through all these Valuation Models and picked a favorable one that let him "honestly" say that. But, again, you not knowing these things lead you to fall for it, and latch onto qualified and highly speculative statements. Did you ever think to ask what model they used? What market comparisons, if any? How they projected revenue?
What we are buying is an asset that is worth about $80-$100 million
based on STS' current and pro forma revenues,earnings growth rates, relative P/E and its ability to generate government contracts in the next three years This is an incredible opportunity for us to acquire an asset for a great price.
Do you not understand what any of that means, because that's literally the only way you could honestly interpret that quote as stating a fact of value and not see it for the pure 100% speculation it was.
It's exactly what I said, they were basing their valuation on market cap (and projections) using a favorable model. Hence, my question to you of "did you ask what model they used"?
Again, how much revenue, exactly, was STS doing on the date of acquisition? It was, has been, and also will be, a speculative merger based on attempting to get a cheap up and comer under a public shell early, with the intent to bolster value and ramp up share price as the newly acquired sub grew.
Market Data 
Markets 
AI
