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Frequently Asked Questions about the FMV Restricted Stock Study™

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Click here view the FAQ page for the FMV DLOM Calculator™.

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What is the legend for FMV Restricted Stock Study™ data?

Term Used in Report
Excel® Format Field Name
Definition
N/A
TransactionID
Transaction ID number used to track transactions.
SIC Code
SIC
4-digit Standard Industrial Classification industry identifier.
NAICS Code
NAICS
6-digit North American Industry Classification System industry identifier.
Name
Company
Company name.
Ticker
Ticker
Exchange identification designation as of the date of the private placement.
Exchange
Exchange
Exchange on which company floats its shares as of the transaction date. AMS, AMEX = American Stock Exchange; NYS, NYSE = New York Stock Exchange; NMS, NASDAQ = Nasdaq National Market System; OTC BB = Over-The-Counter Bulletin Board; OTC = Over-The-Counter Pink Sheets; OTH = Other
Transaction Agreement Date
AgreementDate
Date the Stock Purchase / Subscription Agreement was entered into.
Transaction Announcement Date
AnnounceDate
Date of the first public press release disclosing the terms of the transaction.
Transaction Closing Date
ClosingDate
Date of transaction closing. If the actual date is unknown, the 15th of the month is used.
Transaction Representative Date
RepresentativeDate
If the Agreement Date is available, the Representative Date is the day prior to the Agreement Date. If the Agreement Date is unavailable, the Representative Date is the date prior to the earlier date between the Announcement Date and the Closing Date. This date is used for consistency in finding figures for volatility, VIX, and other variables.
Time to Register
TimeToRegister
Days between the Transaction Closing Date and the Registration Effective Date.
Registration Rights
RegRights
This variable can be “Yes” (the stock was issued with registration rights), “No” (the stock was not issued with registration rights) or left blank (there is not enough information available to determine with certainty whether or not the stock was issued with registration rights). Registration rights tend to improve the marketability of restricted stock. See the Companion Guide for more information on different kinds of registration rights.
Registration Filing Date
RegFilingDate
The date that the company filed for registration rights.
Registration Effective Date
RegEffectiveDate
The date that the registration rights became effective.
Holding Period
HoldingPeriod
The amount of time the restricted stock must be held, based on the SEC rulings at the time of the restricted stock transaction. All transactions occurring before April 1, 1997 are labeled with a two-year holding period. All transactions occurring on or after April 1, 1997 and before November 15, 2007 are labeled with a one-year holding period. All transactions occurring on or after November 15, 2007 are labeled with a six-month holding period.
Transaction Discount
TransactionDiscount
The percentage difference between the private placement price per share and the market trading price per share. Discounts are reported as positive figures, and premiums are reported as negative figures. If stated explicitly in the language describing the private placement, the Transaction Discount represents the discount agreed to between the issuer and purchaser. If not stated, the Transaction Discount is based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Agreement Date. If the Agreement date is not known, the market price represents the closing market trading price as of the day prior to the first to occur of the Announcement Date or the Closing Date.
Stated Discount
DiscountStated
The discount explicitly agreed to between the issuer and the purchaser.
Discount Transaction Date
DiscountTransDay
The discount based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Closing Date.
Discount Announcement Date
DiscountAnnounceDay
The discount based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Announcement Date.
Discount Agreement Date
DiscountAgreementDay
The discount based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Agreement Date.
Offering Price
PricePerShare
The gross per-share sales price for the shares sold in the transaction. Not presented on a net basis (net of fees, costs, etc). The source is usually news reports or the company’s annual report on form 10-K for the year of the transaction.
Transaction Day Close
TransDayClose
Closing market trading price on the trading day immediately preceding the Transaction Closing Date.
Agreement Day Close
AgreementDayClose
Closing market trading price on the trading day immediately preceding the Transaction Agreement Date.
Announcement Day Close
AnnounceDayClose
Closing market trading price on the trading day immediately preceding the Transaction Announcement Date.
Volume
Volume
Aggregate number of shares traded during the 30 calendar days prior to the transaction.
Shares Placed to Volume Ratio
SharesPlacedToVolume
The total shares offered in the transaction, expressed as a ratio of total trading volume for the month in which the transaction occurred.
Shares Outstanding
SharesOutstanding
Total number of common shares outstanding prior to the transaction. A number of different sources have been used to determine shares outstanding, including the statement of shareholders’ equity, the notes to the company’s financial statements, the latest quarterly reports prior to the transaction, and various news reports and other sources.
Shares Placed
SharesPlaced
The total number of shares sold in the transaction. The source is usually news reports or the company’s annual report on form 10-K for the year of the transaction.
Gross Placement Amount
GrossPlacementAmount
Shares offered times the offering price.
Net Placement Amount
NetPlacementAmount
Shares offered times the offering price minus fees. The fees must be explicitly stated in the terms of the transaction for this value to be reported.
Block Size
BlockSize
Shares Placed divided by Shares Outstanding after the private placement.
Volume to Shares Outstanding
VolumeToSharesOutstanding
Volume divided by Shares Outstanding.
Market Value
MarketValue
The market value of the firm, for each transaction, is determined on a pre-deal basis. The market value is calculated by multiplying shares outstanding before the private placement with the high-low average market price for the stock for the month prior to the transaction. In $000s.
Book Value
BookValue
Shareholder’s Equity. Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
MTB Ratio
MTBRatio
The market-to-book ratio is determined by dividing the total market value of the firm, pre-transaction, by the book value of the firm.
Intangible Assets
IntangibleAssets
Usually Goodwill. Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s
Total Current Assets
TotalCurrentAssets
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Total Current Liabilities
TotalCurrentLiabilities
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Total Assets
TotalAssets
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Debt
TotalInterestBearingDebt
Debt equals the company’s total interest bearing debt as of the end of the most recent fiscal year prior to the transaction. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Total Liabilities
TotalLiabilities
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Retained Earnings
RetainedEarnings
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest fiscal quarter end for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Total Revenues
TotalRevenues
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
EBITDA
EBITDA
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
EBIT
EBIT
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Depreciation/Amortization Expense
DepreciationAmortization
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Interest Expense
InterestExpense
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Pretax Income
PretaxIncome
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Net Income
NetIncomeBeforeExItems
Determined as of the end of the most recent fiscal year prior to the transaction for financial firms, or as of the latest twelve months for all other firms. The source is usually the company’s annual report on form 10-K for the year of the transaction. In $000s.
Prior Year Dividend ($)
PriorYearDividendsPerShare
All dividends on common stock, declared for the last fiscal year prior to the transaction. The source is usually the company’s annual report on form 10-K for the year of the transaction.
EBIT Margin (%)
EBITMargin
Operating Income divided by Total Revenues.
Net Profit Margin (%)
NetProfitMargin
Net Income divided by Total Revenues.
Volatility (%)
Volatility
The annualized standard deviation of the continuously compounded rate of return on the Company’s common stock. The standard deviation was determined by examining the week-over-week difference in the weekly closing price, analyzed over the one-year period prior to the transaction date.
Z-Score
ZScore
Altman's Z-score is a measure of the probability of a company entering bankruptcy within the next two years. The higher the value, the lower the probability of bankruptcy. A score above 3 indicates bankruptcy is unlikely, while a score below 1.8 indicates that bankruptcy is possible.
Dividend Yield (%)
DividendYield
Dividend divided by market price per share.
VIX
VIX
CBOE Volatility Index value as of the transaction date. Values for the 6-month trailing average, 3-month trailing average, 1-month trailing average, and daily close are provided.
N/A = Not Applicable  

Is there an FAQ page for the FMV DLOM Calculator™?
Yes, you can view it here.

Has FMV ever removed transactions from the FMV Restricted Stock Study database and the FMV DLOM Calculator that were previously included?
It is FMV’s goal to continually improve the quality of the FMV Restricted Stock Study database and FMV DLOM calculator. In pursuit of this goal, FMV continues to refine the criteria they utilize in screening the transactions. This includes reviewing transaction already included in the database to ensure that both the FMV Restricted Stock Study database and FMV DLOM calculator have only “plain vanilla” transactions. As a result, FMV has removed a limited number of transactions that do not meet these criteria. The vast majority of the transactions removed were transactions with either a zero discount or a premium. There are very few true premiums in the market for restricted stock, and it is believed that premiums are likely the result of an investment opportunity not available to other investors or an unidentifiable relationship with the seller. For each of these transactions with a premium or no discount removed, FMV has now been able to identify the rational for the premium or lack of a discount.

How do your subscribers pass along to their clients the expenses they incur for guideline company data, control premium data, discount for lack of marketability data, economic data, industry data, etc?
Some of our subscribers impose a separate resource/technology charge for every valuation assignment. They know approximately how many appraisals they do per year and divide that number into the [annual] costs of the databases and basic data resources they use, thereby passing along the resource (or technology) charges.

Is the data in the database adjusted for inflation?
Users of the database have the option of adjusting for inflation if they choose. When using the FMV Discount for Lack of Marketability Calculator™, select "Yes" in the dropdown menu next to the "Adjust for Inflation" option. When using the basic search engine for The FMV Restricted Stock Study™, you can copy and paste your results from Excel into the Inflation Adjustment Tool which is available on the FMV Articles page. When adjusting for inflation, the data is adjusted using the Consumer Price Index published by the Bureau of Labor Statistics.

What adjustments, if any, should be made to convert the DLOM into one for a control position from the minority position initially determined by the FMV calculator?
The data in the FMV Study derives from sales of unregistered stock in public companies. The discounts represent the difference between a freely traded share of stock in the company (minority, non-controlling interest) and an illiquid stock in the same company (still a minority, non-controlling interest). These discounts are therefore most appropriate for determining marketability discounts to apply to a publicly traded equivalent (marketable minority) value. That is not to say that the measured marketability discount is not appropriate to apply to a controlling, or partially controlling, interest, only that it is no longer an apples-to-apples comparison. If one is using the FMV Study discounts to determine a marketability for a controlling or partially controlling interest, one should consider that the risk associated with that investment is somewhat diminished relative to a non-controlling interest, and that all else being equal, this would result in a lower discount for lack of marketability than for a non-controlling interest in the same company.

Since the FMV Calculator calculates a minority non-marketable discount, does that presume the discount for lack of control is redundant and not necessary for the income approach?
A controlling interest in a closely held company has the power to affect changes in overall corporate structure and policies, business strategies, and management compensation. A minority or non-controlling interest, on the other hand, has little, if any, power to influence these items. Additionally, the value of a non-controlling equity interest suffers from limited marketability, as there is no ready market in which to affect a sale. Therefore, the Fair Market Value of a fractional interest in the equity of the Company must reflect the diminution of value from both lack of control and lack of marketability.

In regards to the above question, it depends on if the valuation is on a controlling interest or minority interest. If the valuation is dealing with a minority purchase, then it is redundant to apply a lack of control discount and in that case, only a discount for lack of marketability is appropriate. If the valuation is for a controlling interest value, then both a discount for lack of control and a discount for lack of marketability discount should be applied.

Over the years, how has FMV changed the way they report discounts?
Originally, the FMV Restricted Stock Study had three discounts: (1) a high/low average for the transaction month; (2) a high/low average for the prior month; and (3) a high/low average for the subsequent month. This was because, at the time these restricted stock transactions were originally being collected, often the specific day of the month was not published (August 1998 vs. August 7th 1998). At that time, FMV’s recommendation was to use the high/low average for the transaction month.

In 2010 or so, FMV added the transaction date discount. This was the discount as of the day the transaction occurred (utilizing the closing market price on the day prior). FMV was able to add this discount because, for years, new reporting often revealed the specific day of the month. FMV Opinions added this discount to all the historical transactions where the specific transaction date was available. At that time, FMV’s recommendation was to use this discount (the high/low average for the month was less specific than the transaction date).

Recently, while FMV Opinions continues to publish the transaction date discount, they have also added the transaction agreement date discount, the announcement date discount, and the stated discount (if there was a figure published regarding the agreed upon discount between the buyer and seller). At this time, FMV eliminated the high/low average discounts as they were less applicable than the discounts for the transaction date, the agreement date, the announcement date, and the stated discount. Of the various discounts, FMV reports as many as possible for each transaction, then selects one for each transaction to represent a Transaction Discount using the following criteria:

If stated explicitly in the language describing the private placement, the Transaction Discount represents the discount agreed to between the issuer and purchaser. If not stated, the Transaction Discount is based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Agreement Date. If the Agreement date is not known, the market price represents the closing market trading price as of the day prior to the first to occur of the Announcement Date or the Closing Date.
For older transactions that do not possess these discounts (as they were lacking specific dates), the high/low average for the transaction month was carried over and used as the Transaction Discount.

The IRS Job Aid addressed the FMV database in a critical way. Does FMV have a response to the Job Aid?

1. IRS criticism: You can’t reliably use a regression model to determine an accurate discount.

FMV answer: Correct. You don’t use a regression model to determine your P/E ratio and you shouldn’t do it for your DLOM.

2. IRS criticism: The IRS cannot find any statistical relevance regarding the key comparative characteristics recommended by FMV.

FMV answer: The IRS mixed registration rights data, step-premium transactions, with 6-month, 1-year and 2-year holding periods. No wonder they didn’t find a correlation. However, at least 7 non-FMV academic and valuation professional statistical analyses did find statistical correlations with the recommended characteristics.

3. IRS criticism: There is no statistical proof that large percentage blocks of stock have higher discounts than small percentage blocks.

FMV answer: Wrong! At least three academic studies and two valuation studies have found the percentage block to be statistically meaningful. This is important because the large block discounts set a floor for the private company DLOM.

Additionally, Michael Gregory, in the "Job Aid Plus Advice for Practitioners" chapter of his book, Discount for Lack of Marketability and the IRS, states:
"FMV Opinions' model today is a three stage rather than a two stage model that was evaluated in the original Job Aid. I am not aware of any data or model that will meet statistically significant rigor (90 percent confidence level) and analysis that was applied to the FMV model as it was evaluated in the Job Aid."

Is every deal in your database a US-based company?
This is not a criteria by which transactions are screened. However, all issuing companies trade on US exchanges and file with the SEC.

How was the FMV Restricted Stock Study™ created?
The FMV Restricted Stock Study™ was created by FMV Opinions staff over many years. FMV Opinions has used this study internally in its analysis work since the firm's inception in 1991.

How does FMV Opinions, Inc. locate the private placement deals used in the The FMV Restricted Stock Study™ and the FMV DLOM Calculator™?
The original set of 597 deals occurring between 1980 and 2010 were located, screened and vetted by FMV Opinions. As of 2011, FMV Opinions has partnered with Sagient Research, a leader in proprietary research, to locate private placements that have occurred between 1995 and current. After the private placements are located and sourced, FMV screens and vets all the deals, leaving only the relevant deals where restricted stock transacted at fair market value.

Does the FMV Restricted Stock Study™ database contain details on who purchased the restricted stocks in the database? And is there a relationship between any of the purchasers of restricted stock and the issuing company?
All of the transactions in our Study occurred with accredited investors of no affiliation with the issuing party – and there is no available information on the parties to whom the restricted stocks were issued. The purchasers of the restricted stocks in our Study are strictly at arms-length. This means that private placements being offered to or purchased by company employees or executives are NOT used in our Study. The intrinsic value of these stocks are affected when a purchase is made without arms-length and therefore would reflect on the discount. Because we want our study to reflect only “plain vanilla” transactions we kicked out all transactions that occurred with related parties.

Is the FMV Restricted Stock Study™ guaranteed error-free?
No, as with most economic data, a perfect zero-defect rate was (presumably) not attained when The FMV Restricted Stock Study™ was created. Please read this statement for important limitations on FMV Opinions' liability before you use the database. However, all transaction data have been confirmed using multiple sources of information, including news releases, transaction databases, company annual reports and other public filings, and other sources wherever possible.

In the FMV Restricted Stock Study™, is there any criteria that a stock must meet for it to be considered "actively traded"? Are stocks screened for this criteria prior to being included in the Study?
To be included in The FMV Restricted Stock Study™ the stock must have a ticker symbol and have some trading volume during the month of the transaction.

How many FMV Restricted Stock Study transactions are needed to have a statistically valid sample (i.e. after narrowing results with search criteria)?
Statistically valid, in this context (and in layman's terms), means that the mean or median or whatever other measure you draw from the sample will tend to be close to the corresponding measures drawn from the entire population -- using consistent search criteria. Generally speaking, the sample size necessary to generate a statistically valid mean will vary depending on the standard deviation of the sample. Statisticians often discuss whether a particular measure is statistically significant over certain thresholds of confidence (a function of the StDev). Practitioners that use the FMV restricted stock study often generate indications that are meant to be representative for their subject companies based on several search criteria, which can tend to produce small sample sizes. Some appraisers use 20-30 data-points as a rough guideline to how many data-points are required, and tend to be a bit less confident when using sample sizes smaller than that. However, if you see a clear trend towards higher and lower discounts narrowing the sample by certain criteria, it might make sense to consider also the smaller samples, if the indications make sense in conjunction with other research and data.

How does a subscriber verify a subset of data to confirm the data is correct? Is the source documentation for each deal available?
The subscriber can verify each transaction by going to the company's disclosures filed with the SEC. Normally, a review of the 10K and/or 10Q filed after the transaction will verify the details.

I am trying to get an approximation of the time to “dribble out” the shares offered. Would I be correct in dividing the “Shares Placed/Shares After (%)” by the “% of Prior Month Volume to Total Shares Outstanding (%)”?
This calculation would seem to provide an indication of how many months it would take to dribble out the subject block assuming you could double the market trading volume. In other words, if the stock experienced trading volume of 1 million shares each month, and the subject block is 2 million shares, you would calculate 2 months of dribble out. However, there are a few problems with this:

  1. Most data suggests that one can realistically sell between 10-20% of market trading volume without risking an oversupply situation and suffering a reduced price for the shares.
  2. There is an initial holding period of 2 years (transactions prior to March 1997) or 1 year (transactions post March 1997, but prior to the 6-month holding period change decided in November 2007).
  3. Depending on the subject block size and owner’s affiliation to the issuer, dribble out may be impacted by Rule 144 dribble out limitations, which limit resale in any three-month period to the greater of (i) 1% of outstanding shares or (ii) average weekly trading volume for the 4 weeks prior to a sale. Please see the Companion Guide for a more thorough description of Rule 144 requirements.

In short, you have to make some assumptions in order to approximate the dribble out period and this can be difficult and may not always be accurate. The ultimate dribble out period depends on block size and affiliation of the owner to the issuer, which is not generally known. Therefore, we tend to look at the entire group of transactions and consider that (i) all blocks are subject to an initial holding period of 6 months to 2 years, and (ii) most of the transactions are relatively small blocks that could be sold fairly easily after completion of the initial holding period. Accordingly, the study overall (excluding the smaller number of blocks that are very large) indicates the discount for illiquidity associated with a 6 month to 2 year holding period. Unfortunately it’s difficult to get more accurate than this.

What care must be taken when using the FMV Restricted Stock Study™ to determine discounts for asset holding companies?
Asset holding companies are inherently less comparable to companies in the FMV Restricted Stock Study™ than are operating companies, thus there will necessarily be more subjectivity and judgment involved. That being said, the restricted stock data does still provide very useful information regarding marketability discounts.

For real estate holding companies, most appraisers use the Real Estate Holding Limited Partnership (RELP) transaction data as a benchmark, which provides indications of the discount from net asset value (i.e., total discount for lack of control and marketability). In addition to the RELP data, you must consider the additional illiquidity of privately held entities versus publicly registered partnerships such as the RELPs. At FMV Opinions, Inc., we like to make comparisons with small and large blocks of restricted stock in the FMV Restricted Stock Study™, since large blocks are more illiquid due to Rule 144 dribble-out requirements. This provides support for an increment to the discount as indicated from the RELPs.

For securities holding companies, most appraisers rely on Closed End Mutual Fund discounts from net asset value as an indication for the lack of control. The lack of marketability discount can be supported through a restricted stock comparison approach. However, companies in the FMV Restricted Stock Study™ are more volatile than a diversified basket of marketable securities. There is no scientific way to calculate the discount, so judgment must be used. Linear regression analysis might be meaningful, although in general the underlying data does not necessarily demonstrate nice linear correlations. FMV Opinions recommend comparing your portfolio of securities to the FMV Restricted Stock Study™ data across as many variables as possible (e.g. aggregate market value, total assets, earnings, volatility, etc.), and then making adjustments if your portfolio is judged to be less risky than the FMV Restricted Stock Study™ data. The same illiquidity increment discussed above may be warranted as well, depending on the nature of the equity interest you’re valuing.

What do I do if I discover an error in the data?
Should this happen, please email us immediately. Our staff promptly answers emails regarding possible errors, so you can feel assured that any problems are being addressed.

The FMV Restricted Stock Study Advanced Search - Subscriber Results web page now shows summary statistics for one discount (transaction discount). In the past, the web page showed summary statistics for three discounts (prior month, transaction month and subsequent month). What is the transaction discount and why was this change made?
The transaction discount is the percentage difference between the private placement price per share and the market trading price per share. Discounts are reported as positive figures, and premiums are reported as negative figures. If stated explicitly in the language describing the private placement, the Transaction Discount represents the discount agreed to between the issuer and purchaser. If not stated, the Transaction Discount is based on the difference between the private placement price per share and the closing market trading price as of the day prior to the Agreement Date. If the Agreement date is not known, the market price represents the closing market trading price as of the day prior to the first to occur of the Announcement Date or the Closing Date.

In the past, much of the data did not have a transaction date specified, so we used the high-low average stock price for the month of the transaction, along with prior and subsequence months. This change was made because we now have specific transaction dates for most transactions, but also to make it easier for subscribers to have one discount to focus on rather than wrestle with which of the discount to use.

Why are restricted stock studies the most widely used methods for determining marketability discounts?
Restricted Stock studies have become widely used for this purpose because they directly measure the discount between two different market prices simultaneously, for two otherwise identical assets: one liquid and one illiquid (or, the stock trading in the market and the restricted stock sold in a private placement).

What makes restricted stock illiquid?
Restricted Stock is illiquid because it has not been registered for trading with the SEC. Such stock is subject to many restrictions on its transferability. Learn more in the FMV Companion Guide.

Can you provide more FMV Restricted Stock Study™ highlights?
Yes, click here for more study highlights.

Can you provide the methodology used to create the FMV Restricted Stock Study™?
Yes, click here for the methodology.

Can you provide some details on Rule 144 and restricted stocks?
Yes, click here for more information.

Is the data in the FMV Restricted Stock Study™ as applicable for a Family Limited Partnership (FLP) with real estate as it is for corporations?

  • Since The FMV Restricted Stock Study™ includes data on the differences in value between fully-marketable and less-marketable securities, it could be applied to ANY situation where the marketability discount is an issue, but the data is clearly more applicable in some situations than in others.


  • The data is most applicable to the following marketability discount determinations, in descending order: (a.) the restricted (subject to rule 144) stock of publicly traded companies; (b.) the stock of privately held operating entities; (c.) everything else.


  • When valuing non-controlling illiquid interests in FLPs holding real estate, analysts often use transactions from the secondary market for partnership interests (from Partnership Spectrum). This data, since it pertains directly to real estate holding partnerships, are most directly applicable to RE holding FLPs. However, the lack of marketability discount may not be fully reflected in the secondary market discount data, since these interests do have a market, albeit not a very active or liquid one. Thus, the FMV study could be used to determine a marketability discount for FLPs holding real estate either (a.) directly, through determining a discount for entities that are relatively similar to the subject entity and adding this discount to the discount from the secondary market transactions or (b.) as a smaller increment for the incremental lack of marketability of an interest in an FLP vs. an interest in a partnership trading in the secondary market. This last discount could be based on the difference between large block and small block transactions in the FMV study (since large blocks are less liquid than small blocks).

Can you please provide more information on the Z-Score?
Z-Score - Represents the probability for bankruptcy and provides the ability to evaluate the general financial condition of a company and the associated risk of investing in a selected company.

Z = 1.2*(Working Capital / Total Assets) + 1.4*(Retained Earnings / Total Assets) + 3.3*(EBIT / Total Assets) + 0.6*(Market Value of Equity / Book Value of Debt) + 1.0*(Sales / Total Assets) where Working Capital = Current Assets - Current Liabilities

In general, scores range from -5.0 to +20.0, although higher scores may occur if a company has a high equity value and/or low level of debt. Scores above 3.0 indicate bankruptcy is unlikely, scores between 1.8 and 3.0 are inconclusive, scores below 1.8 indicate an increased risk of business failure, and scores below 1.2 indicate a strong probability of business failure.

Note:

Z-Scores are non-linear, a score of 4.0 is better than a score of 2.0, but it does not necessarily mean it is twice as good.

From your observations, is there a reason why negative discounts naturally occur?
First, remember the transactions in The FMV Restricted Stock Study™ are "real world" transactions. Strange things happen in real world transactions. The CEO's nephew was one of the purchasers in the transaction, the buyer got bad advice, the seller drove a hard bargain, the seller was a good salesman, the buyer gave the seller non-public (positive) information in order to induce him to transact, etc. While it is "abnormal" in any given transaction for such things to affect the outcome of the transaction and the transaction price, strange things happen from time to time. Thus, in a very large sample of transactions, such as the sample in The FMV Restricted Stock Study™, it would be normal for abnormal things to be included. Hopefully, this would happen randomly. If it were to happen in a non-random fashion, that might bias the sample. There is no evidence of that happening in The FMV Restricted Stock Study™.

In a large sample, one would expect premiums to happen for random reasons from time to time due to the timing of the transaction date being "off" a bit.

Since the "errors" are random (the authors believe) there would be offsetting errors that go the other way. Thus, if the authors eliminated the premium deals from the database, it would bias the sample.

Does the "Price per share" refer to the price the share was placed (after the discount) or to the price the share was traded at (prior to the discount)?
The Price per share refers to the offering price in the transaction.

I have questions that aren't answered on this page. What do I do?
Just email us. We would be glad to answer your questions!

Why don't I see my SIC code of interest in the search engine's list of SIC codes?
The Web site's search engines use the underlying data to create the list of SIC codes. If your SIC code is not listed in the search engine, this means there are no transactions with that SIC code in the selected database. FMV Opinions does not recommend searching by industry. Other measures are much better predictors of a discount for lack of marketability. Learn more in the FMV Companion Guide.

How can I expand my 4-digit SIC search to a 3-digit search or 2-digit search (select more than one SIC code)?
By pressing and holding down the LEFT mouse button, you can highlight a series of SIC codes (either by two digit SIC codes, three digit SIC codes or any series you want [all of manufacturing, for example]).

By holding down the CONTROL button on the keyboard (and clicking with the LEFT mouse button), you can highlight a noncontiguous group of SIC codes.

Can I print more than one transaction at a time?
To print a group of transactions (the current group size is 10); on the search results page in the list of transactions, utilize the icon that looks like a red piece of paper – it is labeled “Print Detail Report Package”. When printing more than a couple of detailed transaction reports, this will save you time.

I want the transaction reports to fit onto one page, instead of two. What can I do to make this possible?
The best solution is to maximize your print margins. In Internet Explorer the default margin size is 0.75 inches. When you print transaction reports, reduce the print margins to 0.25 inches and most will fit on a single page. Also, you should remove any header/footer information that Internet Explorer includes in web page printouts. The print margins and header/footer settings can be found under File -> Page Setup in Internet Explorer.

Each time after I alter my search of the database and I ask for a printable format, the results of my very first search continues to show in the printable format window. Is there something different that I can do so that I can print the results of the most current search?
Assuming you are using Microsoft Internet Explorer, please do the following:

  • In Internet Explorer, go to the Tools/Internet Options menu
  • On the General tab, in the Temporary Internet Files section, click "Delete Files"
  • On the General tab, in the Temporary Internet Files section, click "Settings"
  • If it is not already clicked, click the "Every visit to the page" radio button, then click "OK"

I am unable to get the printable format window to appear when clicking on “Printable Format” or get the Excel download when clicking "Excel Format."
Check your browser version and update to the latest. Also, check if you have some sort of pop-up window blocker, you need to disable the pop-up window blocker.

Some of the more advanced pop-up window blockers will allow you to customize the specific pop-ups you would like to allow. Otherwise they will need to disable the program in order to view the printable format.

Some pop-up blockers can be temporarily disabled by holding the "Ctrl," or "Alt" keys on the keyboard when you are attempting to allow pop-ups.

Why don’t I see Excel Export as an option when I use Mozilla Firefox?
Currently the Excel Export feature on BVMarketdata.com is only supported in Internet Explorer. The Excel Export uses VBScript which is only supported in Internet Explorer. We are in the process of updating the export function to be compatible with other web browsers. An alternative would be to use the Email to Me option which will email the data to you in a comma separated file.

When I click on the Excel Format button I am asked “Do you have Microsoft Excel installed?” I answer yes and then nothing happens. What is the fix for this?
This typically happens when the subscriber is using a pop-up blocker. To bypass the pop-up blocker, press down on your “Shift,” “Control,” or "Alt" key (try both) prior AND during clicking on the Excel Format button – this should bypass the pop-up blocker. If you are able, you may also add www.BVMarketData.com as a “trusted” site in your pop-up blocker program – this would negate the need to hold down your Control button when you next use the Excel Format button.

We are Windows users and are not successful in downloading the data to Excel format.
If you are using Outlook to browse the internet, you may experience this problem. Apparently web browsing within Outlook has problems passing data from one page to another. To solve this, exit Outlook and use Internet Explorer to access our website.

Another possibility is that you may have a pop-up blocker that is preventing the new window from appearing. To solve this, disable your pop-up blocker by (1) turning the pop-up blocker off until you are done exporting the data (2) holding shift, control, or alt (dependent on your pop-up blocking software) which allows you to temporarily allow pop-ups while the button is pressed, and then reverts to blocking pop-ups once the button is depressed or (3) find the options or settings on your pop-up blocker and choose to allow pop-ups from our website.

We are Mac Users and are not successful in downloading the data into Excel format.
Make sure you are using the most recent version of Internet Explorer for Mac. Here's a link to download the most recent version of IE for Mac.

http://www.microsoft.com/mac/download/default.asp#IE

If you are running Office 2001 for Mac, make sure you have the latest version. Click the link below to download it and install it.

http://www.microsoft.com/mac/downloads.aspx#office2001 and click on Microsoft Office 2001Combined Update 9.0.4

If you have any further questions please contact the Webmaster via e-mail at: nathans@bvresources.com or phone at 888-287-8258 and ask for Nathan.

Can you please discuss the difference between the mean and the median and how I may interpret the mean and median values of the search results?
Click here for an explanation.

I am having trouble viewing the Excel Exported data in Excel 2000. Can you please help with this?
If you are having trouble viewing the Excel exported data from BVMarketData.comsm and are using Excel 2000 (other versions of Excel have not exhibited this problem), please read the following.

In the original version of Office 2000 there was a bug when passing Excel data over the web. This problem was fixed in a service pack released by Microsoft. Once you install this service pack update on your computer you should not have any trouble viewing the Excel data from BVMarketData.comsm.

To update your Office 2000 to the latest service pack release, please locate your Office 2000 CD or Excel 2000 CD and then visit the following web site at Microsoft.com:

http://office.microsoft.com/ProductUpdates/default.aspx

At the top of the page click on the following link:

Check for Updates

You will then be taken through a process of updating your Office 2000 install on your computer. This will update your Excel application as well. During the install, it will ask for your Office 2000 CD.

If you have any questions please e-mail Nathan Struk at: nathans@bvresources.com

Last updated: 04/07/2016

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