Sep. 11 at 10:59 AM
$BSP
Bending Spoons BSP 5.09% is a debt-funded serial acquirer that went public in July. Its name is a nod to psychic powers, but the real hocus-pocus is in the company’s numbers.
The Milan-based company has been hoovering up fading digital-subscription and software companies for years, including AOL, Evernote and Vimeo. Its shares are up 37% since the initial public offering, and its stock-market value is about
$28 billion. That is almost 14 times its revenue over the last four quarters and more than 100 times earnings.
While that earnings multiple reflects official results, management also directs investors to nonstandard versions that make earnings look bigger and the valuation appear lower. Among the biggest add-backs is amortization. This is the book expense to gradually write down the value of its customer base and other acquired intangible assets
If ever a company illustrated the pitfalls of ignoring amortization, Bending Spoons is it.
