Unbelievable numbers being floated around for the sale by Fairfax of part of New Zealand's TradeMe.

http://www.nzherald.co.nz/business/n...ectid=10747541

Fairfax overpaid in 2006 and now wants to seek cash from this market?

Good luck to them!

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Overpaid? Many would argue it was one of their best acquisitions in recent times.

OK.

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Okay big shot, why don't you give me your analysis then? You seem to be indicating the deal was less than successful.

I will wait to see the financials before to make any other comment which so far is purely based on my feeling.

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That's the whole Fairfax group though, not Trade Me. Trade Me is one of the most profitable parts of Fairfax, and enjoyed a 10% increase in profits for the year.

The IPO is going to value Trade Me at a figure considerably higher than Fairfax originally paid, and they're keeping around 70% of Trade Me so they still get to enjoy strong profits while freeing up capital to pay down debt.

It doesn't matter, if you search my old posts some months ago when RenRen (http://www.google.com/finance?q=renn), the Chinese Facebook, debuted on the market and on the first day went higher (up to $24) than the IPO price I warned that it was insane and it was just another bubble 'bubbling'.

Now it's just above $7

Same for LinkedIn.

A P/E ratio of 1000 ?

In Italy there are currently solid blue chip companies delivering a dividend of 8% and with a P/E ratio under 10. That's value.

Then of course if there are fools buying some kind of shares with no intrinsic value and FairFax makes money out of it, good for them. It won't be me buying though.

But as I said, I need to see TradeMe's financials. If they come up with numbers that I hardly expect then it will be another thing.

In other words, would you pay 1000 times (that's 1000 years) the earnings for a domain?

Example: a domain earns $10/year , would you pay $10,000 for it? Please tell me this so I can sell you lots of domains at a special discounted rate of 50% off.

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WTF? Your entire post irrelevant and you're making yourself look stupid.

Trade Me's EBITA for the FY just past was $79m.

From what I've read Fairfax are looking to sell down 30-35% of their holding, and it is expected a raise around $300m cash for them. Based on those figures we can see a valuation of around $1 billion on Trade Me.

So you're looking at an earnings multiple of around 13x, which is so far removed from your 1,000x comparison that it's... well it's just stupid.

Seriously, you need to run some numbers before you embarrass yourself any further.

You know what? I thought there was some kind of manners in this forum. Now I know I was wrong.

Instead of insulting you could have simply pointed me to this $79m that you mention.

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