đ°What was in the News?
Biden proposes legislation to raise the Capital Gains tax: This is front page news, but it will only affect .04% of Americans, because the hike in rates will only be imposed on the rich of the rich. My advice here: Donât make this a reason to sell. Below is a map of how the capital gains tax will differ by state.
Discord âwalks awayâ from Microsoft acquisition: The âwalks awayâ part of this headline is in quotations, because we arenât really sure if there were ever acquisition talks between the social gaming messaging platform and the little company that Bill Gates started. With Discord recently raising at a valuation, and an IPO on the horizon, this may have have been a crafty way to make some headlines and generate free marketing before going public.
JnJ Vaccine is back: The CDC has allowed vaccination sites to administer the vaccination again after a 10 day hiatus (the vaccine was paused on April 13th) . In what many considered a short-sighted pause, the CDC banned all JnJ vaccinations after 6 recorded blood clots (that number has since climbed to 15) stemming from complications tied to the đ. While blood clots can kill people, that is 15 people out of almost 7 million doses. Think of all the people who contracted COVID in this 10 day period that would have otherwise been prevented from more vaccinations.
đ¤Meeting Recap
Answers to the DCF Quiz
DCF is an intrinsic model
Unlevered Cash flows are used in a DCF
Two ways to get terminal value: Perpetuity growth rate and Exit Multiple
Most important part of DCF: Strength of your assumptions
Book Value of Debt is used as proxy for MV of Debt
Market cap is used for market value of equity
Proxy for risk free rate: 10 year t-bond rate
Net debt is added to make implied EV
What is unlevered free cash flow: Cash flow by the company, not including leverage
DCF > Comps
Intrinsic to the company vs. reliant on the market and other businesses - this is not science however, and comps are more commonly used because it is a reflection of what the market will pay for a company, which gives a more accurate representation of itâs value. Many times, bankers do not have the time to build a fullproof DCF in the middle of balancing a myriad of deals.
The future of the Society: Great discussion here. The future and vision for the Society is very important. Jack and I are very open to feedback and would love to hear all the ideas you have for how to best cater to students and run an Investing Society that will be the most helpful, engaging, and informative for future LIONS.
â¨Highlights of the Week:
Max Mulquin put together another excellent quiz. Max was like a personal Chegg for the Society and found a way to stay involved despite having class at the same time as our weekly meetings. Thank you for creating quizzes all semester Max, we really appreciate your work.
Brandon Frith: Great job on the DCF quiz. You got the most right and only had 1 wrong. Keep up the work, not bad for a freshmanâŚ
Jack Peterson: For being the best Vice President in the country and leading the Doorvest team with Addison.
Doorvest team: 5 LION Investing Society members (Addison Valdez, Ryan Khanthaphixay, Jack Peterson, Brandon Frith, and Kavon) finished in the top 5 of a 30+ team Venture Case competition put on by the University of Utah and the Sorenson Impact Center. Here is the company they did their presentation on (Doorvest), a very interesting company that makes it easier for average Americanâs to invest in real estate.
đŽWhat to Look forward to:
E-board elections. Voting is in and the results will be announced shortlyâŚ
One more meeting! We will make it fun and interactive and may even have a guest speaker đ
Finals! This godforsaken academic year is almost behind us. Letâs close it out strong and then have a lit summer â21
Quote of the week:
Taxation is the price which civilized communities pay for the opportunity of remaining civilized.
Albert Bushnell Hart, an American historian, writer, and editor based at Harvard University.