Quote, "2-3x revenue or 8-10x earnings seems good guess but ....none of that matters unless pphm separates avid or dumps pphm staff and facilities. As long as the good co. avid,is tied to the badco pphm, the valuation is moot as avid can not carry pphm burden.
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I 100% agree. "Avid" as it stands today HAS NO "earnings", by any generally accepted accounting or biz definition that I'm aware of.
As Carboat has correctly stated- that reality is 100% due to the fact that "Avid" and all else that makes up "PPHM" are at present, completely intertwined and not being tracked as separate businesses per any generally accepted accounting principals. Thus, it's 100% impossible to show whether or not "Avid" is actually "profitable" on its own, and vis-a-versa for the clinical trials side of PPHM, as to what they are consuming in terms of cash and dilution etc.
Thus, IMO, until "Avid" is spun-off as a totally separate company or 100% stand alone operating unit/division- complete with its own cost structure, own accounting structure, etc- it's impossible to know if they are "profitable" or what they "earn" or what they throw off as free cash flows etc.
PPHM, if they want to "unlock" the true value of Avid, would need to spin it off as a business or vis-a-versa, sell off all non Avid related business and/or legally/accounting-wise, somehow formally separate the two operating units. That would likely include potential one-time accounting write downs, or shifting of assets/liabilities to get them assigned correctly, etc Then move forward from there- filing separate balance sheets and cash flow statements and all the rest for each operating division, tracking them as independent entities.
From that point forward- "Avid" could then be treated as a stand alone operating entity complete with its own cost structure, its own in-coming and out-going cash structure, it's own long/short term obligations, depreciation, and all other technicalities that make up "accounting" per say. And thus, ultimately allow one to determine things like "profit" or "earnings" or "free cash flows" etc
PPHM is muddled up right now IMO. I stated it in a previous post I made- something like this:
Is PPHM now a bio-manufacturing business that runs clinical trials on the side, or vis-a-versa or something in between?
GE and other mega conglomerates are typically very "clean" in how they set up their various operating units and divisions- such that they can show them as profitable or not, how much each division earns, etc. GE divisions (just as one example) are legend for having to compete to get cash or assets or continue projects via approval and funding from the "mother ship" (GE Central) if they are not profitable and not hitting their own metric targets, etc. For example, GE "jet engine division" is 100% a separate operating unit from say GE "energy products" and they both have separate profit and loss targets, separate operating budgets, separate performance target metrics to hit or miss, etc
I think PPHM should set up Avid in the same way. Make it a stand alone, then give it its own set of targets and metrics and sales/marketing cost budget, gross margin targets, production targets, etc and track it all and see if they're performing as a good biz unit or a stellar biz unit or a loser or whatever. But at least let it be 100% transparent what "Avid" is and does, versus the totally different clinical trials side of the biz.
Nothing can be farther apart than running a medical, FDA regulated "manufacturing biz" and then running an R&D clinical trials biz- two totally different animals completely. So why have them all muddled up together on the balance sheet and cash flows statements, etc.
Just another "task" IMO that PPHM Sr Mgt needs to get "cleaned up" and run like a real, first class biz operation- and not a freaking garage shop that looks like some first timers just stumbled into it- not for what these clowns are getting paid.
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