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What is "enterprise value" and how does he come up with 43B?
by tocomment 14y ago
What is "enterprise value" and how does he come up with 43B?
- wpietri 14y agoHe's looking at market price (number of shares times share price) and subtracting cash on hand. That would be the implied value of the operating business.
- deleted 14y ago[deleted]
- Strom 14y agoTake a look at the numbers he mentions: valuation $57.5bn cash on the books $14bn enterprise value $43bn If you look real closely, you will see that 57-14=43.
- iand 14y agoIt's the valuation of the company based on number of shares and share price less actual assets (cash in this case). What is left is the value investors see in the company simply by executing its business.
- aurelianito 14y agoEnterprise value "is a sum of claims of all the security-holders: debtholders, preferred shareholders, minority shareholders, common equity holders, and others." (source: http://en.wikipedia.org/wiki/Enterprise_value http://en.wikipedia.org/wiki/Enterprise_value)
- chrisaycock 14y agoEnterprise value is market cap + debt - cash It reflects how much it would cost to buy a company out.
- arihant 14y agoIt's basically market cap plus the debt, minus the cash. So $57 billion minus $14 billion in cash. Try to think of it as the actual amount somebody would loose from pocket while buying Facebook. While they will pay $57 billion, they will get $14 billion cash from Facebook, effectively spending $43 billion.