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Value of a online poker site
Scenario:
Company "Seller" has a poker site that sells poker products online (like pokertracker, cardrunners, donkit, pokerxfactor, etc). Company "Buyer" has a poker site that also sells a poker service but wants to expand and buy a part of "Seller". (with "Seller" still running it) If "Buyer" buys part of "Seller", then "Seller" will probably start earning more since "Buyer" currently has much more traffic than "Seller". I was thinking something like this: X = what "Seller" would profit for a whole year if they continue to run it themselves. Y = what the "Seller" site would profit for a whole year if they worked with "Buyer". (due to increased traffic after the "merge"). (X+Y)/2 = V = Value of "Seller" So if "Buyer" wants 50% of "Seller" he'd pay V*0.5. Example: "Seller" think they can earn $50,000 the next year if they continue by themselves. "Seller" think they can earn $150,000 the next year if they get traffic from "Buyer" also. (50k+150k)/2 = 100k. "Buyer" can buy 50% of "Seller" for $50k. The reason I think the average works best is because the sellers would get more for their business than it's worth for themselves and the buyer would pay less for a business than it's worth to him. Win-win. None of this comes from anything I've read or learned and was just something I thought up myself so obviously I'm interested in knowing if I'm totally way off and how one should go about making a valuation of a business like this. Thanks. |
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