no-marketability-discounts-or-discounts-for-illiquidity-for-controlling-interests-of-companies 
Chris Mercer
APRIL 7, 2023
My most recent post, titled Fair Market Value and the Nonexistent Marketability Discount , generated quite a discussion when posted on LinkedIn. The post provided a solid rationale that there is no such thing as a marketability discount for controlling interests of companies. ” (p.
Chris Mercer
MARCH 29, 2024
Introduction and Conclusion My musings on the use of restricted stock discounts to estimate marketability discounts (or DLOMs) have led me to the conclusion: Restricted stock studies/discounts cannot be used to estimate DLOMs in any credible, standards-compliant manner. What is a Pre-IPO Discount?
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Chris Mercer
FEBRUARY 23, 2024
My conclusion is that the various restricted stock studies are inadequate to meet current business valuation standards and that they should not be used as a basis for “guessing” the magnitude of marketability discounts for illiquid interests of closely held businesses.
Chris Mercer
MARCH 7, 2024
The second and third musings address the issue of marketability discounts and conclude that it is not possible to comply with any valuation standards, whether USPAP or not, using only averages of restricted stock studies as a basis for “guessing” marketability discounts.
Chris Mercer
MARCH 8, 2023
This post provides a discussion of several implications of the definition of the standard of value known as fair market value. We focus first on the definition of fair market value. We then look at the implications for the so-called “marketability discount for controlling interests.”
Chris Mercer
NOVEMBER 15, 2022
Atticus Frank will present tomorrow and talk about why market multiples differ between and among industries. I have heard many appraisers suggest that one should not normalize owner compensation when valuing minority interests “because the minority shareholder cannot change compensation.” The conference is going well.
Chris Mercer
OCTOBER 5, 2022
At trial in the Beway matter , the Supreme Court (the lower court in New York) held one session in which the net asset values of nine family-owned asset-holding companies were determined to total $128.2 The petitioners owned the interests indicated in the exhibit above, which was developed in the McGraw Report. million, as seen below.
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