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2021 DLOM Study Is Out Now

The 2021 Discount for Lack of Marketability Study provides objective rate of return measures to implement the Johnson/Park empirical method for determining a discount for lack of marketability (DLOM) for the valuation of interests in privately held corporations and partnerships. This report instantly provides you with the most current DLOM rate of return information including a thorough explanation and example on how to apply these data.

A Current View of the Restricted Stock Studies and Restricted Stock Discounts

Although there is relevant evidence in some restricted stock studies that can be helpful for marketability discount determinations, comparisons with average discount observations from these studies do not provide a meaningful methodology to estimate marketability discounts. We conclude this despite the fact that too many valuation analysts continue to rely on simplistic comparisons with averages of restricted stock discounts from dated studies in their marketability discount determinations.

Red Flags Appear in BVR’s DLOM Survey Results

There are a number of areas of concern in the responses to BVR’s recent survey on methodology and practice for estimating a discount for lack of marketability (DLOM).

2021 Johnson/Park DLOM study is now available

The Johnson/Park empirical method to estimate a discount for lack of marketability (DLOM) is one of the most popular methods business appraisers use for this purpose, according to a recent BVR survey.

2021 Discount for Lack of Marketability Study

September 2021 PDF

Bruce A. Johnson, James R. Park

Johnson/Park

The 2021 Discount for Lack of Marketability Study provides objective rate of return measures to implement the Johnson/Park Empirical Method for determining a discount for lack of marketability (DLOM) for the valuation of interests in privately held corporations and partnerships.  Learn more >>

BVR’s Discount for Lack of Marketability Survey: Results Show Some Red Flags to Watch For

BVR’s recent survey on methodology and practice for estimating a discount for lack of marketability (DLOM) garnered over 200 responses. After analyzing the results, we identified several red flags that were worthy of further exploration. Read on to learn more!

Mercer chimes in on BVR DLOM survey

“Our profession has a long way to go in terms of understanding what DLOMs, or marketability discounts, really are,” concludes Chris Mercer (Mercer Capital) in his analysis of BVR’s 2021 DLOM survey.

QMDM increases foothold in DLOM toolbox

Almost a quarter (22%) of valuation analysts polled say they use the quantitative marketability discount model (QMDM) for quantifying a discount for lack of marketability (DLOM).

Appellate court affirms zero DLOM for a 100% control interest

In a divorce matter, an Indiana appellate court has upheld the lower court’s decision not to allow a discount for lack of marketability (DLOM) on a 100% control interest in a business the husband owned.

The most popular option model for estimating DLOM

Almost half (48%) of respondents to a recent survey say they use option pricing models to estimate a discount for lack of marketability (DLOM), and the Finnerty model is the one most cited, according to BVR’s DLOM survey.

Full results of DLOM survey now available

BVR’s survey on methodology and practice for estimating a discount for lack of marketability (DLOM) garnered over 200 responses.

Ghaidarov Offers a New Framework for DLOM

Ghaidarov, who has published papers related to option price models for estimating a discount for lack of marketability (DLOM), presents a new concept for illiquidity discounts.

DLOM survey reveals methods of choice

The use of restricted stock studies remains the most cited methodology for quantifying a discount for lack of marketability (DLOM), according to the preliminary results of BVR’s 2021 DLOM survey.

Reminder: Please take our DLOM survey

BVR is conducting a short survey that examines the methodologies and specific tools practitioners use to estimate DLOM.

DLOM for a 100% interest in a private company?

One-third of valuation practitioners apply a discount for lack of marketability to a 100% interest in a private company, and 50% say “maybe,” reveals preliminary results of BVR’s DLOM survey.

A busy initial public offering (IPO) market

June had over 60 initial public offerings, and the second quarter of 2021 was the busiest quarter for IPOs in over 20 years.

Updated Data in Largest Pre-IPO Study Reveal High Discounts

New pre-IPO data for the first quarter of 2021 has been added to the Valuation Advisors Lack of Marketability Discount Study, which is the largest study of its kind. The use of pre-IPO data is a widely used and accepted method for estimating a discount for lack of marketability (DLOM).

DLOM gauge spiked in 1Q2021, per updated pre-IPO study

The use of pre-IPO data is a widely used and accepted method for estimating a discount for lack of marketability (DLOM).

The NICE DLOM Method Gets a Few Shots in the Arm

The nonmarketable investment company evaluation (NICE) method, which first appeared in 2006, is included in leading valuation books but it has not gained much traction and had not appeared in any court cases—until now. Plus, a streamlined version of the model will be out soon, according to the method’s developer, William H. Frazier (W.H. Frazier & Co. Inc.).

NICE DLOM method gets a nice boost

The nonmarketable investment company evaluation (NICE) method for estimating a discount for lack of marketability (DLOM) first appeared in 2006 and is included in leading valuation books.

Business Valuation Update Yearbook, 2021 Edition

January 2021 Hardcover, PDF

BVR (editor)

Business Valuation Resources, LLC

Always a highly-anticipated annual publication, the Business Valuation Update Yearbook 2021 covers the year’s most groundbreaking and thought-provoking advancements on valuation methodologies in the face of a global pandemic.  It also captures, changes in regulations and professional standards, key takeaways from the best virtual conferences, and tactical practice-building ideas. This critical desktop reference puts you ahead of the competition with on-the-ground reporting from valuation experts, thought-leaders, and BVR’s expert editorial and legal teams. Learn more >>

Estimating a COVID-19 Marketability Discount for Small Businesses

A framework of thinking for developing a marketability discount for a majority interest on a small business in the wake of the pandemic.

Analyst develops a COVID-19 marketability discount

Valuation analysts have several ways to reflect the extra risk of COVID-19 on businesses, such as adjusting the cash forecast and tweaking the company-specific risk premium (CSRP).

Latest Study Available for the Empirical Method for Determining DLOM

The 2020 Discount for Lack of Marketability (DLOM) Study, recently released by Partnership Profiles, offers objective rate of return measures to implement the Johnson/Park empirical method. This method uses three approaches to measure the increase in return required to compensate investors for the lack of marketability of a subject interest.

New version of ‘Stout Restricted Stock Study Companion Guide’ now available

The most widely used restricted stock transaction database for providing empirical support for a discount for lack of marketability (DLOM) is the Stout Restricted Stock Study (formerly FMV Opinions).

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