Deja Vu #8: Review of the FMV/Stout Restricted Stock Database

This analysis of the FMV/Stout Restricted Stock Study is the eighth in a series of posts on the tried and true restricted stock studies relied on by appraisers for many years. This post, like the previous posts in the series, questions the use of restricted stock studies as a basis for determining marketability discounts for illiquid minority interests of businesses.

Deja Vu #7: The Mandelbaum Factors and “Benchmark Analysis”

This post addresses the so-called Mandelbaum “benchmark analysis” which was created by Judge David Laro in his decision in Mandelbaum v. Commissioner. This analysis has received considerable valuation press. It is time that we examine it on a current basis.

Deja Vu #6: The Silber Restricted Stock Study (1981-1988)

This is the sixth post in a “deja vu” series focusing on the handful of famous restricted stock studies published by the mid-1990s based on transactions occurring through the 1980s. The post provides a convenient reference to each of the prior posts for reader convenience. This post addresses the Silber Study, the most transparent of all the early studies, and provides some very interesting insights.

Deja Vu #5: The Maher Restricted Stock Study (1976)

In this “deja vu” series about the “old and tired” restricted stock studies, we are working our way through the leading early studies. We have already examined the SEC Institutional Investor Study, the Gelman Study, the Trout Study, and the Moroney Study. In this post, we examine the Maher Study. The story does not get better with repetition. So read on.

Deja Vu #4: The Moroney Restricted Stock Study (1973)

This is the fourth post in a series on the historical restricted stock studies that appraisers have referenced for many years and is a review of the Moroney Restricted Stock Study. The first three posts in the series addressing can be viewed: 1) SEC Rule 14 pre-April 1997, 2) the SEC Institutional Investor Study, and 3) the Gelman Study and the Trout Study. Moroney’s central finding was that the Tax Court had embraced the concept of marketability discounts, but had been reluctant to grant discounts commensurate with their economic reality in the marketplace.

Deja Vu #3: The Gelman (1972) and Trout (1997) Restricted Stock Studies

In the first post in this Deja Vu series, we discussed the Securities and Exchange Commission’s Rule 144 from a layman’s perspective as of pre-April 1997, when the mandatory period of restriction was lowered from two years to one year.  The second post reviewed the SEC Institutional Investor Study, which was published in 1969. This third post reviews two more of the early restricted stock studies: the Gelman Study and the Trout Study. 

Deja Vu #1: SEC Rule 144 (Pre-1997) as Background for Restricted Stock Discounts

Deja vu is a feeling of already having experienced a present situation.  In my initial review of “Valuing a Business, Sixth Edition” (VAB6) by Shannon Pratt/American Society of Appraisers I was reminded that I had reviewed a significant number of the studies summarized in its Chapter 19 back in 1997, when my book, Quantifying Marketability Discounts, was published. In this and a few future posts, I’ll share what I believe is the most complete analysis of the historical restricted stock studies that are still relied upon by many business appraisers.

Appraisal Review #9: The Conceptual Valuation “Spaces”

The levels of value chart is one of the most important descriptive figures for business valuation. In a previous post, we gave names to the “spaces” on this chart, which are familiar valuation discounts and premiums used by business appraisers. This post focuses on why those “spaces” exist and the economic factors that create the familiar discounts and premiums.

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Revenue Ruling 59-60: What it Says (and Does Not Say) About FAIR MARKET VALUE

A new feature on ChrisMercer.net allows new subscribers to download a copy of my new eBook, What Revenue Ruling 59-60 Says (and Does Not Say) About FAIR MARKET VALUE. This post provides the opportunity for existing subscribers to obtain their copies of the new eBook.

Appraisal Review #8: A Story of Review from the Archives

This post recalls an appraisal review assignment of mine from many years ago.  After the last seven posts where we have talked specifically about appraisal review from a broad perspective, it is appropriate to discuss one specific case where appraisal review was key to arriving at a settlement to a bitterly fought buy-sell agreement dispute.