The SPAC Podcast: Special Purpose Acquisition Company

DCF or Market Approach, Which One Wins?

Joshua Wilson

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0:00 | 0:39

DCF or Market Approach? Ryan McGuire explains how analysts decide which valuation method carries more weight in SPAC transactions and when financial forecasts can (or can’t) be trusted.
Guest: Ryan McGuire: https://www.linkedin.com/in/ryanquinnmaguire/

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👉 Michael J. Blankenship - https://www.linkedin.com/in/mikeblankenship/
👉 Joshua Bruce Wilson - https://www.linkedin.com/in/joshuabrucewilson/
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Disclaimer: Michael J. Blankenship is a licensed attorney and partner at Winston & Strawn LLP. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is for informational and educational purposes only and should not be considered legal, financial, or compliance advice. All views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the policies or positions of any regulatory agency, law firm, organization, or employer. Listeners should consult their own legal counsel, compliance teams, or financial advisors to ensure adherence to applicable regulations, including SEC, FINRA, and other industry-specific requirements. This podcast does not constitute a solicitation or recommendation for any financial products or services. Let's 

Connect on LinkedIn: 

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Michael Blankenship:

When you’re doing a fairness opinion, and deciding whether to rely on market comparisons or cash flow models, how do you make that decision?

Ryan McGuire:

It varies case by case.

If the company has a strong operating history and relatively reliable financial forecasts, the income approach, DCF, is going to be king.

However, if the company isn’t generating positive cash flow, revenue is inconsistent, and there are good market comps available, that’s when we lean more on the market approach.

We always consider both it just depends on the situation which one we ultimately weight more heavily.