Comments on: What is the Sound of One Hand Clapping? What is the Right Price when there is no Market? http://alephblog.com/2009/05/24/what-is-the-sound-of-one-hand-clapping-what-is-the-right-price-when-there-is-no-market/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Mon, 13 Feb 2012 17:14:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: qhttp://alephblog.com/2009/05/24/what-is-the-sound-of-one-hand-clapping-what-is-the-right-price-when-there-is-no-market/comment-page-1/#comment-21854 q Wed, 27 May 2009 18:52:28 +0000 http://alephblog.com/?p=1741#comment-21854 also fyi, mr wilson's low estimate uses a 37% vol, and his high estimate uses an 80+% vol (!), which is why he comes in so much higher. also fyi, mr wilson’s low estimate uses a 37% vol, and his high estimate uses an 80+% vol (!), which is why he comes in so much higher.

]]> By: qhttp://alephblog.com/2009/05/24/what-is-the-sound-of-one-hand-clapping-what-is-the-right-price-when-there-is-no-market/comment-page-1/#comment-21853 q Wed, 27 May 2009 18:36:24 +0000 http://alephblog.com/?p=1741#comment-21853 i got similar numbers to yours. i also used a 50bp borrow rate assumption, which i think is low, if anything. i think this is the wrong time for the T to auction the warrants off -- the warrant sales could conflict with stock sales for recapitalizing. on the same note assuming a 100% probability that ONB could raise capital is reasonable as well, given that if ONB isn't able to raise capital, the warrant sale would probably suck as well. but i think they should forget about them for a couple years and then sell them. i got similar numbers to yours.

i also used a 50bp borrow rate assumption, which i think is low, if anything.

i think this is the wrong time for the T to auction the warrants off — the warrant sales could conflict with stock sales for recapitalizing.

on the same note assuming a 100% probability that ONB could raise capital is reasonable as well, given that if ONB isn’t able to raise capital, the warrant sale would probably suck as well.

but i think they should forget about them for a couple years and then sell them.

]]> By: Markhttp://alephblog.com/2009/05/24/what-is-the-sound-of-one-hand-clapping-what-is-the-right-price-when-there-is-no-market/comment-page-1/#comment-21838 Mark Tue, 26 May 2009 03:57:09 +0000 http://alephblog.com/?p=1741#comment-21838 As any M&A professional will admit, "the real value of anything is what is sells for." Every bank with this warrant on the books now has a comp to ruthlessly pound on. As any M&A professional will admit, “the real value of anything is what is sells for.” Every bank with this warrant on the books now has a comp to ruthlessly pound on.

]]> By: JOEhttp://alephblog.com/2009/05/24/what-is-the-sound-of-one-hand-clapping-what-is-the-right-price-when-there-is-no-market/comment-page-1/#comment-21835 JOE Mon, 25 May 2009 22:07:42 +0000 http://alephblog.com/?p=1741#comment-21835 Your "tweak" is not all that novel, it's standard taught in game theory 101- and the outcome under rational behavior is the same as a more traditional auction (also same with dutch-style auctions, same with closed bidding and open bidding). Of course your assumption is that these are not rational (or not fully-auction-educated) actors. I like how enthused you are though. Nice post Your “tweak” is not all that novel, it’s standard taught in game theory 101- and the outcome under rational behavior is the same as a more traditional auction (also same with dutch-style auctions, same with closed bidding and open bidding). Of course your assumption is that these are not rational (or not fully-auction-educated) actors.

I like how enthused you are though. Nice post

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