When is Share Trading Liquid Enough for IER Valuation?
Independent Expert Reports (IERs), or “fair & reasonableness” reports require a valuation of the subject Company. When we write an IER we consider if we can use a listed company’s share price as a valuation method. But there needs to be an “active and deep liquid market” for it to be a meaningful guide to value.
This article examines how we assess this and where we think a meaningful liquidity ratio starts.