Valuation of Priceline.com

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Valuation of Priceline.com

• Professor Joshua Livnat, Ph.D., CPA
• 311 Tisch Hall
• New York University
• 40 W. 4th St.
• NY NY 10012
• Tel. [phone] Fax [phone]
• jlivnat_at_stern.nyu.edu
• Web page www.stern.nyu.edu/jlivnat

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Financial Data
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Income Statement Ratios
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Visitors
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Gross Margin (Revenues - CGS)
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Regression of Gross Margin on Visitors
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Regression of SellMrktg on Visitors
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Regression of GeneralAdmin. on Visitors
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Regression of RD on Visitors
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Volume Analysis

• Assumptions
• Selling marketing expenses flat after 40MM.
• GA expenses flat after 12 MM.

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Forecasted Cash Flows
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Valuation
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Summary

• A unique concept in the Internet space.
• Ideal for perishable goods.
• Narrow market segment, but not an insignificant
  one.
• Has potential if it can control costs better.