- 44 -
discount. We agree. Nonetheless, we found those reports and the
additional testimony at trial of Mr. Pratt to be quite helpful in
ascertaining the lack-of-marketability discount that we shall
apply in this case.
Petitioner contends that the 23-percent lack-of-marketability
discount determined by Mr. Thomson is too low because, inter alia,
Mr. Thomson failed to consider the IPO studies relied on by Mr.
Howard and/or Mr. Pratt. In Mr. Thomson's rebuttal report and at
trial, he explained that, to the extent that the IPO studies
examined data with respect to stock prices subsequent to the
valuation date, he believed that those data could not be
considered in valuing each of the two blocks of stock at issue
because the Uniform Standards of Professional Appraisal Practice
provide that the cutoff date for data used in a retrospective
appraisal is the valuation date. We agree. However, Mr. Thomson
admitted at trial that, to the extent that the IPO studies
considered data with respect to stock prices prior to the
valuation date, those data were readily available on the valuation
date and could have been considered in valuing each such block.24
We agree and find that Mr. Thomson should have considered the pre-
24 At trial, Mr. Thomson indicated that he believes that at
least one of the IPO studies may be biased because it was based
on “insider transactions”. However, Mr. Thomson’s rebuttal
report, which was submitted to the Court well before trial, did
not reflect any such criticism of that IPO study (or of the other
IPO study), which means to us that Mr. Thomson does not consider
his criticism at trial about the possible bias of one of the IPO
studies to be significant.
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