12/17/2006

Good e'Valuation' ?

Just wanted to talk about the private equity acquisition of Sabre while it was still fresh in my mind..Management at the top is in high spirits (guess literally too :)) and has been saying that this acquisition is almost the best thing that Sabre could ask for. I almost see it as a loss of confidence in ourselves, loss of focus, vision in what we are and what we could be. Compare this..YouTube was recently acquired by Google for around $1.65 billion and Sabre's price was $4.5 billion, just around 2-3 times of what YouTube was bought at.

Agreed that video is the next biggest thing on internet and YouTube with it's sizeable userbase is a very valuable company to possess. I don't doubt it's valuation but have the notion that Sabre is worth much more than it thinks it is. Sabre is the biggest travel company in the world and has agreements with almost all airlines. It's presence in Europe and Asia is growing every day and it has made some very strategic acquisitions there. Assuming that the average spending on travel per person in this world is $20 (very reasonable estimate!), we are talking about a market that is more than 100 billion dollars and a growing one...Sabre perched at the top can do so much and gain so much which makes me feel that setting a goal of $4.5 billion is like aiming to be in the top 50% of your class...Maybe I am wrong, maybe my basic stats or wrong...don't know..all I can say is that my heart sings a different tune!

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