781.708.4445

wmlevine@levinedisputeresolution.com

Divorce Mediation Blog

Dell-a- ware Valuation Decision and DCF

Wednesday, November 09, 2016

A Vice Chancellor (we love that title) of the Delaware Chancery Court recently ruled that Michael Dell and Silver Lake Partners undervalued Dell, Inc. stock by more than 26% in engineering a going private transaction, to the detriment of shareholders. After hearing the discounted cash flow analyses of experts for both sides, at an appraisal trial, the VC (apt abbreviation) rejected both.

In doing so, he noted that market price is not necessarily an indicator of value, a proposition that seems, at first blush, to be mildly shocking. We are used to searching for value in closely held businesses because they have no public market to provide value. Where there is a public trading record, we do tend to accept it: the market rules. Minority discounts are even baked in because every share is a non-controlling interest.

The VC’s reasons that public share value is a reflection of perception in the marketplace from known information, presumably from regulatory disclosures, proxies and press accounts perhaps. They lack, however, insiders’ understanding which yields a more sophisticated measure of value. A little bit troubling as an investor, but sure: not everything is public record. With a going private transaction, wherein public investors are being divesting of their stakes, the company owes a fiduciary duty to maximize shareholder value, so his reasons commonsense.

We won’t get into the DCF decision-making of the VC. Interesting to some but as dry as a bone to most.



Get e-mail notifications of new blog posts! Enter email address below.:



Delivered by FeedBurner

other articles


recent posts


tags

divorce litigation arbitrators family law mediation Matrimonial Arbitration mediators resolve disputes fraud litigation Family Law Arbitration divorce arbitrators Massachusetts arbitration family law arbitrator family law arbitrators Levine Dispute Resolutions health insurance how baseball arbitration works divorce mediations divorce mediators rehabilitative alimony Massachusetts lawyers Baseball Players divorce mediation private dispute resolution traditional negotiations arbitrator dispute resolution MLB labor agreement annulment alimony reform legislation child support family support The Seven Sins of Alimony Massachusetts alimony and child support divorce process family law divorce and family law mediators Divorce Self-adjusting alimony orders divorce arbitration Massachusetts divorce lawyers IRC §2704 disputes alimony law Chouteau Levine LDRC Levine Dispute Resolution facilitated negotiations separation med-arb special master divorce and family law family and probate law disputes Massachusetts Alimony Reform Act alimony Boston Cohabitation Act Reforming Alimony in the Commonwealth Major League Baseball Arbitration divorce agreement General term alimony Uniform Arbitration Act Divorce Agreements Baseball divorce judgment alimony statute divorce mediator Child Support Guidelines Massachusetts divorce mediators alimony orders mediation Baseball Arbitration Massachusetts Lawyers Weekly pre-ARA alimony support orders health coverage divorce arbitrator Defense of Marriage Act high-risk methodology family mediation lawyer Alimony Reform Act self-adjusting alimony mediations Levine Dispute Resolution Center LLC DOMA COLA med/arb Levine Dispute Resolution Center medical benefits SJC divorced lawyer-attended mediation mediator Massachusetts alimony conciliation Obamacare Same Sex Marriage lawyers divorce lawyers