When to Apply a DLOM

The Ipreo Blog has an ongoing mission to feature insight and analysis from across Ipreo’s different business units. In the past we’ve discussed the pathway to a career in investor relations, the state of the new issue market for investment-grade fixed income, and the impact the upcoming presidential election may have.

Today, we turn to one of our experts within the private capital markets space for a discussion of DLOM, i.e., a discount for lack of marketability.

Matthew Pringle (CPA/ABV), a Valuation Analyst with Ipreo Private Capital Markets who specializes in business and securities valuation engagements for corporate finance, financial reporting and tax purposes, takes to the blog today to explore the challenges private companies face when determining when and where to apply a DLOM to equity shares.

Excerpt:

In valuing a private company, public companies are often used as indicators. While there are a number of relevant situations for this approach, the one most familiar to a majority of valuations on Ipreo’s Qval platform is the use of the guideline public company method. This is where the DLOM becomes relevant.

Read the full Special Report – Apples and Oranges: When to Include Discounts