Lets pretend that Forbes is correct, and the Astros are "worth" $442 million. Forbes listSteinbenner says that sounds about right, Marlins front office says bull. On 11/10/92, the Astros changed hands. Mclane paid, give or take, (and to make it a round number) $100 million for the team. WalMart stock opened at 62.63 on that date. However, because it has split a few times, the adjusted price was 14.04. WalMart is at 49.02 today. If Mclane had just bought $100 million of stock, how much would that be worth today? We will leave out 15 years of dividends, again for the sake of brevity.
Not wanting to steal your thunder, or anything, but there's no running costs involved in owning WalMart stock. Of course, if Drayton has also been making a profit on the Astros (which I don't know one way or the other), then this isn't a problem.
$350M
Yeah, leave out costs too. I just want to know what the stock would be worth. Do you divide the 100 million by 14.04 or 62.63? What would all that be worth now? In 2007 dollars.
Good answer. Would you like to show your work? (briefly)
(briefly)
For $100 Million dollars, you can buy 7.12 million shares at $14.04. (What he actually would have "bought" on that day was 1.6 million shares for $62.63, but the splits would have turned that into the 7.12 million shares.) Today those 7.12 million shares would be worth almost $350 million. (which is what joshd put above, I just felt the need to expound and hear myself type)
Just looked up the splits, yep, it split 2 for 1 twice since 92, so about $313 is what I get. Not counting dividends. That's money in his pocket, not projected value.
Right. So, ignoring profit/losses of running the team, time investments, and being associated with Bud Selig, the Astros are a better deal than Wal-Mart.
$62.6 million
Yeah, and ignoring that he would have made about $62.6 million on Wal-Mart's last dividend of 22 cents per share.
7.1M * .22 = $1.56M. And the .22 was high. .10 more typical. So, .40/year for 15 years * 7.1M = $42M in dividends for this time period (although the splits probably make it more like $30M)
7.1 was how much he could have bought in 92, it has split 2:1 twice, wouldnt he have about 28 million shares at this point?
That's $62.6 million before tax. After tax, it's $62.6 million. Wait! What? Fuck.Bonus ire: My effective tax rate = 17.8%. Walmart's effective tax rate = 3.2%
Back off! They underpay MILLIONS of US employees!
A better way to value the investments in on their internal rate of returnAssuming the Astros have gone from 100MM to 442MM in 15 years, the IRR is 10.4% (not bad).For the Wal-Mart stock (not including Dividends), the IRR is 8.7%. Over the same period, the S&P500 has returned roughly the same as Wal-Mart (maybe a touch more but I believe this figures include dividend reinvestment). Now, I don't know how to estimate the risk profile of a baseball team relative to the S&P 500; my gut feeling is that a baseball team is a safer investment (has anyone ever lost money on a sale?) That would make his return even better. Of course, this gets all the more complicated when you factor in dividends vs. net operating income of the team; if they are running at a loss (does anyone still believe that? I forget), then obviously the IRR is decreased (vs. the actual return being slightly higher for Wal-Mart).
Don't forget about the fantastic benefits they give their legions of "part-time" employees.
The cute old lady that welcomes me with a cart sure seems happy. I doubledog dare you to spend 5 minutes here.
Triple dog dare here: http://walmartwatch.com/aboutThere's tons of information on both sides. This isn't going to be resolved by spending five minutes reading one website or another about it. If you really care, read a bunch of stuff on both sides (and maybe even some neutral ones) and come to your own conclusions. But, overall, remember that 99% of the world and 99.9999% of this messageboard doesn't give a shit.
But, overall, remember that 99% of the world and 99.9999% of this messageboard doesn't give a shit.
Not to hijack the thread, I think the venom normally directed at WalMart is misguided. What they do isn't illegal (mostly), so they are doing what they are required to do by law - maximise returns for shareholders. The problem lies with the invertebrates in Washington.If you owned a chicken plucking factory, you'd know what I'm talking about.
Now this is veering into a lane I never intended. I was looking for some perspective on the Forbes valuation and what Mclane could have reaped by an alternate and obvious investment. It's possible he could have taken his $100 million to Poland and practically owned the place by now.
Wait... Someone on this site does?
If you owned a chicken plucking factory, you'd know what I'm talking about.
Now this is veering into a lane I never intended.
(4) hard to do a 3-way with a couple of silicone enhanced double d's strippers when Wal-Mart has a kick ass earnings release. at least when compared to the night the Astros won the NL Pennant.
couple other things to note...(1) it would be hard for a single investor to buy up $100M worth of stock in one day and not cause the price to trickle upwards. Especially one who would have been considered an "insider" back in 1991(2) when he bought the astros he also got a couple of hotels and the lease to the Astrodome, which was worth something. (3) he now owns Sheriff Blaylock's secret recipe. can you really put a price tag on that?(4) hard to do a 3-way with a couple of silicone enhanced double d's strippers when Wal-Mart has a kick ass earnings release. at least when compared to the night the Astros won the NL Pennant.
Oh, dont get me started on the Poles!
You got a problem with the Poles???
