Unformatted text preview: TOMdotCOM SUGGESTIONS & CHECKLIST
Here is a checklist of items you need to address. There may be more items, not listed here, that
you need to address. You may use this or a similar table in your report if you wish.
What Did You
Do? Item Source of the
Information Is there sufficient cash flow information
to use standard valuation methods?
Is the “Perkins Approach” useful here?
What assumptions do you need to make?
Dilution due to options
What is the CAGR that justifies the ask
price for this IPO?
How likely is Tom.com to achieve this
How sensitive is your answer to the
All things considered, what do you think
is the most likely CAGR, and what IPO
price does it imply?
You do need to come up with your own valuation for Tom.com
This case provides an opportunity to apply non-standard valuation methods to a high-tech
startup. Note that all the value-related figures are in HK$s. The so-called Perkins approach
results in a CAGR. It is important to realize that this is not a forecast for the company. It is
what average growth rate the company must achieve in order to justify its asking price. 1 ...
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- Financial Markets, Basic financial concepts, valuation methods, perkins approach