Replies to post #24659 on Marker Therapeutics Inc (MRKR)

[Burrhead1]

Here is a previous post from Phantom........this should help answer your question.....

Re: erg61 Post# 24599
I definitely don't mind, lol. It is a bit off though. As of the last 10Q dated 8/9/2018 (HERE) the below numbers, post merger, are a bit closer:


Shares Outstanding: ~44.9 million
Warrants: ~23.25 million
Fully Diluted Share Count: ~68.15 million

*The rest of the post was modified from my original post using the updated numbers above.*

I would say Tapimmune’s valuation before the merger announcement would be in the $200M - $300M range. No more. From what it sounds like the valuation put on Marker was $600M - $800M. That would put the value of the combined company at approximately $800M - $1.1B. Feel free to put your own valuation on it but this is based on numbers I have heard thrown around. It could end up being higher or lower. That remains to be seen.

Based on the outstanding shares post-merger that would be a price range of $17.82 - $24.50. At that range all warrants would be within their exercise price so we will also have to look at the fully diluted share count. That would put the price range at $11.74 - $16.14.

This is, again, post-merger and based on my conservative calculations using what we can assume the companies are worth AT THIS POINT IN TIME. As we get more data I expect this valuation to increase. Please note that this is not taking into account the ridiculously low float. My estimate is the float is about 5-6 million shares. This isn’t changing even with the new financing unless the new holders dump shares immediately which I would assume they aren’t going to do. Most of the institutions are in for the long haul. Due to the low float and increased interest I expect this to trade above its valuation for a bit. The float should also add some volatility. If you are trading it there should be plenty of opportunities for entries and exits. If you are holding long term then ignore the price swings.

Again, all of this is my opinion only and in the end we don't really know what will happen.



Replies:
Has anyone got the mailing proxy yet so
AntiMarv on 9/21/2018 4:58:07 PM
Thanks Phantom! Always appreciated!
erg61 on 9/24/2018 12:34:31 PM



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[microcapbiotech]

When merger is completed and ticker symbol is MRKR, the combined market cap (depending upon some GAAP considerations) should be between the range of 442 million and 671 million.
That's a wide margin and I can't see it being higher than 671, something around 535 million would be my estimate.

[Phantom Lord]

It's a merger, not treated as an IPO. Just two companies combining their technology to create one company. It's not a "new" company.

Market cap is never set by anyone. It is just a calculation of outstanding shares times share price. Supply and demand essentially dictate the market cap. It's rarely a proper indication of what a company's value is. The name of the game is finding stocks trading under what their true value is. If you think a company is worth $100M and it is trading at a market cap of $50M the buy as much as you can. If it is trading at $150M t
he sell. The hard part is coming up with a proper valuation.

We don't really know what it will look like come close of the merger but if you can come up with a fair valuation then it won't really matter.

Sorry if this post sounds like I'm rambling a bit. I'm tired, lol.

Good luck.

[microcapbiotech]

AN IN DEPTH ANSWER TO LEARN, if you want to follow up on your question
When 2 public companies merge, the market cap is easy because they both have established market caps.
With a private company involved it get a bit more difficult for many reasons.

Let's start with 5 things, GAAP, Goodwill, DFC, WACC, and EBITDA.
GAAP is "generally accepted accounting practices".
Goodwill is what valuation does the company place on it's "good name" and intangible assets.
For example, Boeing has a good will of 7.11% of assets or almost ONE BILLION dollars.
Fred's Floors may have goodwill of $1000.
It can be from 0 to a billion+.

And then you have DCF or "discounted cash flow", it’s more common in healthcare and bio-tech, where multi-stage DCFs to value firms based on the potential market for new drugs are more common.
Forecasted free cash flows (net income + depreciation/amortization, capital expenditures, change in working capital) are discounted to a present value using the company's "weighted average costs of capital" WACC.
The DCF method also tends to work better for more mature private companies that are sponsor/venture backed and or that have very solid comparables that you can use to calculate some of the numbers above.

What price does the private company put on their real estate assets?

How will Marker adjust many of their expenses and “normalize” them to industry-standard levels?
What is their EBITDA "earnings before interest, taxes, depreciation and amortization?

The private company’s margins may be artificially inflated because the Founder/CEO doesn’t pay himself enough (for the sake of building his/her company up).

As a private company, are there any non-standard revenue and expense recognition policies, non-business expenses being counted as business expenses, public has to use GAAP.

And there are also present and future tax considerations based on the above and GAAP.

Basically there are 2 answers to what will market cap be.
#1, You use comps or comparables to valuate.
My comps were in my first response, 442 Million to 671 Million with 535 seeming reasonable.
#2, We won't know until it's done and we know.

Hope this helps answer your question