RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Tax loss arrives Earlier this year Again, consolidating your two posts into one response here
Noshortsallowed wrote: Q3 is coming and the latter half of the year is going to show the fruits of all the cash flow (that could have been EBITDA had it not been reinvested) because WELL has been investing heavily in WISP and Circle medical. That's probably why you wanted to trot out their essentially flat EBITDA as a result of all that investment to suggest they aren't really growing all that much. Why don't we wait until Q3 to see what their EBITDA and cash flows are like. Well has show time and again that they can grow at a pace much higher than what you deem to be "unreasonable".
you want examples? Amwell trades in the mid 20s for that multiple but in this space it's actually hard to find companies that have psotive EBITDA. An NYU report recently pegged "healthcare services" as having an industry wide multiple of 25 and digital healthcare according to the same report is over 45.
see for yourself
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html
Fair enough, let's see if they hit the growth numbers required to hit your 2023 estimates. For the record, though, they have not shown "time and again" that they can grow EBITDA at the required pace.
Noshortsallowed wrote: And by the way I didn't say that the reduction by 27% was immaterial, my point was that you are discounting that value in full without attributing ANY value to the value of rights of refusal and buy back guarantee terms or the fact that through having operational control they can force those minority interests to subscribe to their other services. Remember WELL's strategy is all about controlling the fragmented clinician market and take advantage of the flows of information and products between clinics, hospitals, pharmacies, other health care providers and patients (and all of the sub-services those units need). One day there will be a whole slew of new products and services to be deployed at those nodes and WELL will own that infrastructure.
That is true, you did not say that directly, but it was glossed over. You are correct in that WELL has "call options" on some of these businesses and that they are not reflected in my numbers. The easy fix to that is to estimate the value of those options and add it to the top. If those options are worth, say, $50 million in intrinsic value, then the per share valuation increases by about $0.22.
However, these options would need to be exercised and that can't be done on a "net exercise" basis, which means WELL will have to pony up cash (through debt or equity issuance). It is probably more likely that they will book a gain any of those businesses are sold to third parties.