domainlover
Top Contributor
Iselect buys Infochoice for 33.5 miilion, in their 2010 results Infochoice only made 77k profit on sales of 2 million.
My understanding is in when it comes to investments, earnings are based on profits not revenues.I guess I am missing something? Based on infochoice's own results, that means iselect is investing at a multiple of nearly 17 times annual earnings.
Seems crazy high - I guess iselect knows something we don't?
My understanding is in when it comes to investments, earnings are based on profits not revenues.
So that would make their PE Ratio - 33,500,000/77,000 = 435!
They obviously believe that the infochoice business fits them well.
Comparison website iSelect has now spent $33.5 million on the Infochoice, BidMyLoan and Once Life businesses, looking to expand its position as the leading aggregator of financial and household services quotes in the country.
My understanding is in when it comes to investments, earnings are based on profits not revenues.
So that would make their PE Ratio - 33,500,000/77,000 = 435!
They obviously believe that the infochoice business fits them well.
Great news, glad to know I am positioning myself in a HOT industryIselect buys Infochoice for 33.5 miilion, in their 2010 results Infochoice only made 77k profit on sales of 2 million.
The company is not valuable to anyone who doesn't have an ability to extract a greater profit margin from those revenues though, and often buyers like this can be hard to find and even if such people exist they are often unwilling to buy you out rather than let you (their competitor) go bankrupt unless you have something else of value.For example if they had a few million in billings then the company is valuable.
Lots of big companies piss money away all the time, especially online companies. I have no doubt that the vast majority of online mergers and acquisitions of this sort of nature turn out to be flops.I mean these companies are big they are not just going to throw money at nothing they know what they are buying into.