Marvel Enterprises
What did we Get for 250 Million?

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By Wheelco
November 2, 2005

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While my Internet was down from the Hurricane, I did go back and try and update my models. Looking at MVL I asked myself one question: what value did we get for MVL spending 250 million on the stock buyback? Sad to say, not much.

My value on the company last year was around 27 per share, based on my views and my simple DCF model (cash in the bank plus future cash flow). One of the things I have been seeing is a decline in share value under this approach; I now value MVL at around 24.50 per share. I had not really focused much on this decline (share price is well below my projected price). But I started looking and realized, what did we get for 250 million? In short (no pun intended), MVL spent this money with no real value obtained for the expenditure. The number of shares purchased basically is the same as the amount of options granted. You can draw your on conclusions. Again I would have rather seen a dividend started. Looks like we financed more of Ike and Avi's lifestyles.

About the only thing it has done for me is create some short term trading opportunities that have helped me earn an ok return over the past year. But I find this troubling that they spent 250 million, with nothing to show for it and no one is saying a thing about it!

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