2.

What is the current stock market valuation of Creative Computers and of Ubid based on the stock
prices as of December 9? As stock market valuation reflects assets in place plus growth opportunities,
estimate the market’s assessment of the growth opportunities of each firm. (Remember that balance
sheets have to balance). Are these assessments reasonable?
Untuk menghitung current stock market valuation maka menggunakan harga saham pada 9
Desember 1998 dikali dengan number of shares outstanding pada 9 Desember 1998 maka hasil yang
didapatkan berikut ini:
Ubid Market Valuation = ( $35.6875 per share ) x ( 9,146,883 shares )
= $326,429,387
Creative Computers Valuation = ( $22.75 per share ) x ( 10,238,703 )

= $232,930,493

The current stock market valuation of Ubid is roughly $326,541,000. Creative Computers has a market
valuation that is actually less than Ubid and less than Creative Computers’ ownership of Ubid
(~$261,233,000) and is roughly $232,930,000. Ubid’s market valuation creates a goodwill account that is
about 98% of its total assets, and Creative Computers has an investment in Ubid that makes up 56% of
its total assets. This makes Ubid detrimentally risky to its equity holders (there’s nothing to liquidate to
pay them if Ubid goes into bankruptcy) and puts Creative Computers in a position that is highly
dependent on Ubid’s performance.

The market valuations of both Ubid and Creative Computers seem very unreasonable with
respect to the assets associated with each firm. The total assets of Ubid is only $6,048,000 and
does not nearly reflect the extremely high valuation that the market has given it. For this reason,
a rationale investor might be led to believe that Ubid is overvalued.

Creative Computers has $142,831,000 in total assets on its balance sheet. Additionally, the case
states that Creative Computers has promised to distribute the remaining 80% of Ubid to the
shareholders of Creative Computers six months after the IPO of Ubid. For this reason, the stock
price of Creative Computers should be higher and certainly doesn’t reflect the total assets of the
firm and the pending retrieval of 80% of the remaining Ubid shares. Creative Computers should
have a market capitalization that is 4x larger than Ubid without even accounting for Creative
Computers other assets. Instead, Ubid shares were selling at a large premium to Creative
Computers shares. For this reason, a rationale investor might view Creative Computers shares as
undervalued.
Valuasi pasar dari kedua Ubid dan Komputer Kreatif tampaknya sangat tidak masuk akal berkenaan
dengan aset yang terkait dengan masing-masing perusahaan. Total aset Ubid hanya $ 6,048,000 dan
hampir tidak mencerminkan valuasi yang sangat tinggi yang diberikan pasar. Untuk alasan ini, seorang
investor rasional mungkin dituntun untuk percaya bahwa Ubid dinilai terlalu tinggi.
Komputer Kreatif memiliki $ 142.831.000 dalam total aset pada neraca keuangannya. Selain itu, kasus
tersebut menyatakan bahwa Komputer Kreatif telah berjanji untuk mendistribusikan 80% sisanya dari
Ubid kepada pemegang saham Creative Computers enam bulan setelah IPO Ubid. Karena alasan ini,
harga saham Komputer Kreatif harus lebih tinggi dan tentu saja tidak mencerminkan total aset
perusahaan dan pengambilan tertunda 80% dari saham Ubid yang tersisa. Komputer Kreatif harus
memiliki kapitalisasi pasar yang 4x lebih besar dari Ubid tanpa memperhitungkan Aset Komputer Kreatif
lainnya. Sebaliknya, saham-saham Ubid dijual dengan harga besar untuk saham Creative Computers.
Untuk alasan ini, seorang investor rasional mungkin melihat saham Creative Computers sebagai
undervalued.