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1989, on an illiquid minority basis, was $3,530,575, or $4.94 a
share. Subsequently, respondent came to realize that Spiro had
made a computational error, and offered a correction to Spiro’s
conclusion; viz, that the value of the shares was $3,004,399, or
$4.20 a share.
In reaching his conclusion, Spiro relied on numerous
factors, including, specifically, the following: (1) An analysis
of the corporation’s operating results and financial condition;
(2) an analysis of the U.S. economy and the semiconductor
industry; (3) a forecast of operations after the date of
valuation; and (4) an investigation of the prices that investors
were paying for the stock of comparable publicly traded
companies.
Spiro’s analysis of the corporation’s financial condition
was based primarily on his review of the corporation’s annual
reports and Forms 10-K and 10-Q for 1985 through 1989, an income
statement of the corporation for the 6-month period ending
September 30, 1989, and a Form S-1, filed on April 27, 1990, in
connection with the corporation’s initial public offering.
For the first half of 1990, revenue was $21,771,000, which,
if annualized, would be $43,542,000 for 1990, a 43-percent
increase over 1989. Spiro concluded, however, that, given the
corporation’s growth in sales, it was unlikely that there would
be no growth in sales during the second half of 1990. Therefore,
he expected that the corporation’s growth in sales for 1990 would
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