May. 12 at 4:34 PM
$CMRC I keep hearing promoters of Commerce, BigCommerce claim that it is "Trading at ~1x Revenue (Market Cap
$258M vs. Revenue
$342M)"...
👉 In professional M&A, you don't value a company on Market Cap / Revenue; you use Enterprise Value (EV) / Revenue.
>> The Math: Enterprise Value = Market Cap + Debt - Cash. <<
👉 BigCommerce has
$157M in debt. If the market cap is
$258M, the Enterprise Value is actually ~
$371M.
👉 The Reality: They aren't trading "below revenue." They are trading at roughly 1.08x EV/Revenue.
While low, this isn't a "diamond in the rough"—it's the market's way of saying the debt is so heavy it’s eating the equity alive.
👉BigCommerce issued
$345M in 0.25% Convertible Senior Notes in 2021.
>> The Maturity Date: These notes mature on October 1, 2026. <<
👉 The "Cliff" Problem: In 2021, the "conversion price" was set around
$68/share.
$RZLV