Leaps and the DLOM

January 2013 978-0615-60555-5 Softcover

Ron Seaman

Authored by Ron Seaman, LEAPS and the DLOM is an indispensable resource for every valuation practitioner. Ron has been studying the universe of Long-Term Equity Anticipation Securities (LEAPS) for five years to understand what they show about discounts for lack of marketability (DLOMs), which are key attributes in the valuation of closely-held shareholdings and other interests. Such discounts are frequently a significant reduction in the value of those holdings. Thus, courts and valuation practitioners are requiring better, market-based substantiation of the discounts. Leaps and the DLOM includes the 2010/11 Study and comparisons to earlier years, industry studies, and more LEAPS on Exchange Traded Funds (ETFs).

Table of Contents

  • Foreward
  • What is a DLOM?
    • The four components. The "price at conversion." LEAPS show the cost of price protection
  • What are LEAPS?
    • How do they work?
  • LEAPS Studies
    • Purposes Of The Studies
      • What is studied. Sources of the data. Discount calculations.
    • 2010 LEAPS Studies: Financial Characteristics
      • 2010 Study; Annual Comparisons
      • Discounts By: Revenues Size; Total Assets Size; Dividend Yield;
      • Company Beta; Profit Margin; Debt/Equity Ratio; Return On Equity
    • 2010 LEAPS Studies: Industry Characteristics
      • Discounts By: Industry Sector; Industry Sub-Category;
      • Technology Industry; Healthcare Industry
  • How fast do DLOMs change?
  • How to use LEAPS
  • LEAPS on ETFs (Exchange Traded Funds)
  • Advantages and Disadvantages of LEAPS