Intro
Our mission at Notice is to level the playing field for all private market participants. One way we achieve that is by providing our members with waterfall models to help them understand the critical impact of capital structure on common shareholders. Today we are thrilled to announce that we now include historical daily M&A exit values for all share classes on Notice Price charts for the 400+ company profiles that feature a waterfall model.
What are M&A exit values?
M&A exit values are the proceeds of a merger that are divided across all classes of stock if the company was acquired today at the current market cap. Notice assumes no corporate debt in our waterfall calculations, but you can modify that assumption in the waterfall model located on the company profile.
Why are M&A exit values important?
Many late stage companies (particularly those raising capital at a discount to previous rounds) may need to grant new preferred shareholders generous preferences that can reduce proceeds for common and earlier preferred shareholders in a M&A exit. M&A exit values are therefore critical to understanding the value of a company's stock when researching companies and diligencing investments.
Three examples of Notice M&A exit values giving you an edge in the market by providing insights specific to your share class and current market conditions.
You see a heavily discounted block of Flexport common stock at a valuation of $2.2B or $3.75/share. Notice M&A exit values show how the cap structure weighs on common over time to the point where common shareholders would get $0.00 if Flexport is bought today at the current market cap.
You want to build a position in Fever Labs. Notice M&A exit values show that Series Seed-1 is worth 2.3x common due to anti-dilution provisions. So, the last round at 3.10 actually valued the Seed-1 at $7.11. Good to know.
You own Brex Series B shares. The last round PPS was $34.74, but in the secondary market, Brex is trading at $12.30, and the Series B M&A exit value is currently $10.90. How should you mark your position? Should you explore liquidity?
How do I view M&A exit values on my Notice Price chart?
Click the "M&A Values" button in the Notice Price chart
Select the share classes you want added to the Notice Price chart from the drop down menu. The order in which you select the share classes will control how they are layered on the chart, with the last share class you select being the top layer.
Each share class exit value has a different color line on the Notice Price chart, and the blue line always represents Notice Price, which is the price at which the stock is currently trading in the private market.
Why do I see breaks in the lines for some share class M&A exit values on the Notice Price chart?
There are two reasons why there may be breaks in the daily share value lines on the Notice Price chart.
There may be some periods when we cannot generate M&A exit values.
If two or more classes of shares have the same value on any given day, you will only see the color of the share class that you selected last from the drop down menu. The lines for other share classes will be hidden underneath the one you see on the Notice Price chart.
Can I share Notice Price charts with M&A exit values?
Yes, you can share the chart by clicking the "share" button above the Notice Price chart. The person you share the chart with must also be a Notice Pro member to see M&A exit values on the Notice Price chart.
We want to hear from you!
Please email us to share your thoughts on waterfall exit values on the Notice Price charts and any other product enhancements you would like to see.