So MS botches the DCF forecast and plugs the discount rate to get back to the same value. The result? An estimated 8.0 percent discount rate (lower than their estimate for Facebook).
Any thoughts? How does this happen? Should they be taken off the Aramco IPO?
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That is hilariously blatant. I wonder if the PT is hard-coded in their model.
I can almost guarantee that they just goal seeked it.
ER is so FOS, especially after an IPO.
Isn't a DCF always kind of full of shit in the first place?
Isn't IBD valuation full of shit in the first place?
Isn't marketplace buying and selling prices so full of shit in the first place?
The sad truth.
There's full of shit and then there's 8.1% equity risk for Snap. How this Analyst is even allowed publish is beyond me, surely it calls the legitimacy of their future work into question.
This is what happens when you use a valuation tool for pricing. Sad.
You would imagine they would at least come up with a new share price. This is a joke and embarassing to our industry.
Couldn't agree more. what person thought to himself "no one will notice a multi-billion $ cash flow error from the lead underwriter in the biggest IPO to hit the market in 5 years"? FFS just knock a buck off the target price and move on. This "solution" was so, so much worse. Among other things, MS now has to explain why Snap's cost of capital is lower than insanely profitable Facebook's. Good luck w/ that.
Should they be taken off the Aramco IPO?
Seems like the appropriate action would be to fire the publishing analyst or drop coverage - taking them off the Aramco IPO would actually be a little strange (different sector and technically a different business division for the Aramco IPO)
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