The Charles Schwab Corporation and Subsidiaries - Page 46

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               The universe of theoretically potential buyers was limited.            
          Although Rose was the smallest of the top five discount brokerage           
          firms, its business represented a 2.8-percent market share of               
          discount brokerage customers.  Petitioner, on the other hand, was           
          the largest of the discount brokerages, and its nearest                     
          competitor, Fidelity, had a 17.8-percent market share.  Because             
          of the relatively large number of customers serviced by Rose, it            
          is unlikely that any discount brokerage other than the top few              
          would have the operating capacity or ability to absorb and                  
          effectively and profitably use such a large customer base.  It              
          was the potential for customer capacity and the potential synergy           
          of customer absorption that made the large discount brokerages              
          the willing buyers and produces the benchmark for the fair market           
          value of Rose’s customer accounts.  Respondent would have us                
          ignore this established fact and value the accounts in a manner             
          that would give value to assets that were of no import to                   
          potential purchasers.                                                       
               Rose’s customers represented its only income-generating                
          asset.  Rose’s infrastructure and name would be of no consequence           
          or interest to potential buyers, who, of necessity, had to be               
          larger entities with successful operations and name recognition.            
          Under these circumstances, respondent’s expert’s going-concern              
          approach to value is incongruous and unhelpful.                             








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