Random Beer Thoughts

[reverseapachemaster1]

Of course it's normal to pay more than post-financing book value per share. Book value is an accounting term, not a measure of how much the equity is worth, and it has nothing to do with the distinction between tangible book value and overall book value.

Here's a simple example. Suppose Shaun Hill starts a brewery and forms a corporation where he owns all 50 shares of stock. He's going to run the brewery, and he starts the company off with an injection of $100. At that point, the book value is $100, or $2/share. Then he offers to issue an additional 50 shares to the public (which dilutes his ownership stake to 50%) and JulianB buys those shares at a price of $50 each, because he knows that Shaun Hill is a genius and the company is going to be immensely profitable. After that offering, the company has 100 shares outstanding; a total book value of $100+$50*50 = $2,600; and a book value per share of $26.

The fact that JulianB purchased at more than the post-offering book value per share is totally normal and does not represent an instant devaulation for anyone. The fact that JulianB purchased his shares at $50 does not magically make the book value of all shares equal to $50.

This works if you don't count goodwill as part of book value, which more precisely makes it tangible book value.

 

[owens99]

Here's a simple example. Suppose Shaun Hill starts a brewery and forms a corporation where he owns all 50 shares of stock. He's going to run the brewery, and he starts the company off with an injection of $100. At that point, the book value is $100, or $2/share. Then he offers to issue an additional 50 shares to the public (which dilutes his ownership stake to 50%) and JulianB buys those shares at a price of $50 each, because he knows that Shaun Hill is a genius and the company is going to be immensely profitable. After that offering, the company has 100 shares outstanding; a total book value of $100+$50*50 = $2,600; and a book value per share of $26.

The fact that JulianB purchased at more than the post-offering book value per share is totally normal and does not represent an instant devaulation for anyone. The fact that JulianB purchased his shares at $50 does not magically make the book value of all shares equal to $50.

This works if you don't count goodwill as part of book value, which more precisely makes it tangible book value.

For accounting purposes, nothing I described would create any goodwill. Shaun Hill's initial investment of $100 doesn't create any goodwill, nor does JulianB's purchase of shares create any goodwill.

 

[reverseapachemaster1]

For accounting purposes, nothing I described would create any goodwill. Shaun Hill's initial investment of $100 doesn't create any goodwill, nor does JulianB's purchase of shares create any goodwill.

Goodwill is quantifying the reason Julian paid more than tangible book value for the shares.

 

[owens99]

Goodwill is quantifying the reason Julian paid more than tangible book value for the shares.

That's fine if you want to speak in terms of economic goodwill - it's why market prices tend to be more than book values. But economic goodwill is not the same as the goodwill on Balance Sheets, nor does it necessarily affect the book value numbers that started this entire stupid discussion. In my illustration, for accounting purposes, there was no goodwill on Shaun Hill Brewing Corp's Balance Sheet, either before or after issuing shares to JulianB.

 

[pjs234]

That's fine if you want to speak in terms of economic goodwill - it's why market prices tend to be more than book values. But economic goodwill is not the same as the goodwill on Balance Sheets, nor does it necessarily affect the book value numbers that started this entire stupid discussion. In my illustration, for accounting purposes, there was no goodwill on Shaun Hill Brewing Corp's Balance Sheet, either before or after issuing shares to JulianB.

wow... i'm in public accounting and this conversation is rough... can we take this to the GAAP thread?

 

[Lutter]

Of course it's normal to pay more than post-financing book value per share. Book value is an accounting term, not a measure of how much the equity is worth, and it has nothing to do with the distinction between tangible book value and overall book value.

Here's a simple example. Suppose Shaun Hill starts a brewery and forms a corporation where he owns all 50 shares of stock. He's going to run the brewery, and he starts the company off with an injection of $100. At that point, the book value is $100, or $2/share. Then he offers to issue an additional 50 shares to the public (which dilutes his ownership stake to 50%) and JulianB buys those shares at a price of $50 each, because he knows that Shaun Hill is a genius and the company is going to be immensely profitable. After that offering, the company has 100 shares outstanding; a total book value of $100+$50*50 = $2,600; and a book value per share of $26.

The fact that JulianB purchased at more than the post-offering book value per share is totally normal and does not represent an instant devaulation for anyone. The fact that JulianB purchased his shares at $50 does not magically make the book value of all shares equal to $50.

This math with brewery stuff mixed in is extremely Kevin-ish....

 

[Gonzoillini1]

wow... i'm in public accounting and this conversation is rough... can we take this to the GAAP thread?

So I just searched for a GAAP thread thinking you were serious.

You weren't serious were you?

 

[reverseapachemaster1]

This math with brewery stuff mixed in is extremely Kevin-ish....

Change pies to partially unfermented fruited hazy IPAs.

 

[pjs234]

So I just searched for a GAAP thread thinking you were serious.

You weren't serious were you?

no GAAP thread... yet. sorry to dissapoint.

 

[MooseLang]

This ******* website is supposed to be my escape from Accounting, and you are all ruining it. Look what you've done.

 

[Lutter]

So I just searched for a GAAP thread thinking you were serious.

You weren't serious were you?

no GAAP thread... yet. sorry to dissapoint.

Ugh. Please no. I do accounting all day. It literally hurt my mind to read about it on here. I had to take an aspirin.

 

[jivex5k1]

Jeez how many of you are accountants?

 

[capnmike]

So I just searched for a GAAP thread thinking you were serious.

You weren't serious were you?

 

[Gonzoillini1]

no GAAP thread... yet. sorry to dissapoint.

When it does inevitably get created I'll be following if only to throw in Wire GIF's and add some real estate perspective.

 

[Lutter]

Jeez how many of you are accountants?

I assumed 95% of people on here were lawyers, insurance adjusters, and accountants.

 

[trickytunadicky]

I’d follow a GAAP thread. I work for a non GAAP firm but have to report accruals to GAAP clients. Fun times.

 

[arren]

Jeez how many of you are accountants?

The secondary market ain't going to exploit itself

 

[sherm10161]

In for the GAAP Accounting thread.

Also in for a thread on Statutory Accounting.

Not an accountant, but I spend much of my time being pestered by accountants.

 

[ggfunk]

What the **** is wrong with you people?

 

[sherm10161]

What the **** is wrong with you people?

Welcome to TalkBeer!

 

[Gaseous Clay]

STL and Baltimore are essentially standalone cities that don't share a county with their suburbs which increases per capita murder statistics. Come visit, just don't try to buy crack or heroin and you'll be fine. Or do, I'm not your mom.

Baltimore has been cancelled since they demolished Lexington Market.

 

[lb304854]

What the **** is wrong with you people?

They're accountants.

 

[litheum94]

 

[Lutter]

https://www.austin360.com/entertain...er-with-whiskey-twist/IX2Me3IEn8PKlaPH4aKzcK/

Shiner is making an 11% ABV Barrel Aged Marzen?

The ****?

Alright... special LIF if anyone wants to play. Please use hashtag #shinerbuild in your post (because this thread is long) and include a Texas or Disney meme. Whomever gets the closest, to the penny, at the grocery store I go to (HEB) to how much I pay for 1 bottle of this will win a bottle (assuming I’m able to get 2). Will pick a winner as soon as I get one and will alert on here and via PM. Price is Right rules apply if two people are within the same amount of cents.

Keep in mind a bomber of regular Shiner is like... $1.99. Their highest ABV Beer ever is like 5.7

 

[JulianB1]

https://www.austin360.com/entertain...er-with-whiskey-twist/IX2Me3IEn8PKlaPH4aKzcK/

Shiner is making an 11% ABV Barrel Aged Marzen?

The ****?

Alright... special LIF if anyone wants to play. Please use hashtag #shinerbuild in your post (because this thread is long) and include a Texas or Disney meme. Whomever gets the closest, to the penny, at the grocery store I go to (HEB) to how much I pay for 1 bottle of this will win a bottle (assuming I’m able to get 2). Will pick a winner as soon as I get one and will alert on here and via PM. Price is Right rules apply if two people are within the same amount of cents.

Keep in mind a bomber of regular Shiner is like... $1.99. Their highest ABV Beer ever is like 5.7

#shinerbuild

$9.97

Thanks for the chance!

 

[Lutter]

https://www.austin360.com/entertain...er-with-whiskey-twist/IX2Me3IEn8PKlaPH4aKzcK/

Shiner is making an 11% ABV Barrel Aged Marzen?

The ****?

Alright... special LIF if anyone wants to play. Please use hashtag #shinerbuild in your post (because this thread is long) and include a Texas or Disney meme. Whomever gets the closest, to the penny, at the grocery store I go to (HEB) to how much I pay for 1 bottle of this will win a bottle (assuming I’m able to get 2). Will pick a winner as soon as I get one and will alert on here and via PM. Price is Right rules apply if two people are within the same amount of cents.

Keep in mind a bomber of regular Shiner is like... $1.99. Their highest ABV Beer ever is like 5.7

 

[jbeezification1]

https://www.austin360.com/entertain...er-with-whiskey-twist/IX2Me3IEn8PKlaPH4aKzcK/

Shiner is making an 11% ABV Barrel Aged Marzen?

The ****?

Alright... special LIF if anyone wants to play. Please use hashtag #shinerbuild in your post (because this thread is long) and include a Texas or Disney meme. Whomever gets the closest, to the penny, at the grocery store I go to (HEB) to how much I pay for 1 bottle of this will win a bottle (assuming I’m able to get 2). Will pick a winner as soon as I get one and will alert on here and via PM. Price is Right rules apply if two people are within the same amount of cents.

Keep in mind a bomber of regular Shiner is like... $1.99. Their highest ABV Beer ever is like 5.7

To clarify it’s 750ml, not a bomber (22oz). I have never seen a 750 of Shiner but I regularly pass up their 22oz bottles at HEB. It think it’ll price more in line with their 22oz seasonal releases + cost of barrel aging + that extra 2 or so ounces.

I’m positive you’ll be able to get 2 or more.

 

[Lutter]

To clarify it’s 750ml, not a bomber (22oz). I have never seen a 750 of Shiner but I regularly pass up their 22oz bottles at HEB. It think it’ll price more in line with their 22oz seasonal releases + cost of barrel aging + that extra 2 or so ounces.

I’m positive you’ll be able to get 2 or more.

 

[jbeezification1]

Just trying to help your Lutter It Forward.

 

[iong516]

#shinerbuild

$16.94