As you said the discounted earnings is one method.

Probably the most popular method though is the price to earnings method. You use the earnings that the company makes per year (post-tax profit) and multiply it by the price : earnings ratio (P/E) of the shares. In the case of a private company, there is no (P/E) ratio given. Therefore, you use the P/E ratio of a company in a comparable industry. In this case, you could take the P/E ratio of PartGaming which is 23 (http://uk.finance.yahoo.com/q?s=prty.l) This is incredibly high compared to most industries, for example Tate & Lyle has a P/E ratio of 10 (valued at 10 x earnings), and so likely reflects the growth potential predicted in the industry / other reasons.

You should then make some adjustments to the P/E ratio, to take into account for any differences. For example, it would be harder for an owner of FTP shares to transfer them as they're not publicly listed etc. This would likely decrease the P/E ratio by ~ 20%, so you'd probably use a P/E ratio of ~ 18.4. The earnings can be be obtained from the accounts. So if FTP had earnings of $50m last year (this is a complete guess i don't know) then it may be valued at ~ $920m (18.4 x $50m).

The earnings figure used should be future maintainable earnings however, and so FTP would likely argue that future maintainable earnings will be much lower due to impending UIGEA implementation etc, to lower the valuation of the company in the case.

Valuing FPT at $4bn seems ridiculously high and would suggest that you believe that they have maintainable earnings (post-tax profit) of ~$220m. However, in suing FTP she's obviously going to over-value the company to try and increase her claim of her 'stake'.

You've got to be kidding. How would this happen?

Stupidity. But I've helped untangle stupid people out of similar messes. You wouldn't believe how dumb otherwise intelligent (i know that may be stretching it here) people are when it comes to forming business relationships. I'm sure the world will never know what happens to this though, most likely settlement with confidentiality clause.

yay we finally have a telephone number for FTP

I think if I had an agreement with someone where the other person's end of the agreement was that they had to give me something worth $40 million, I'd probably want to have something in writing.

This.

Perhaps that is why there are no paper contracts for "ownership" stakes.

don't have much to say, guess i'll cu in 2010

Wow i did not see a freeway girl making those kind of money, guess i underestimated the market.

CG must have become a freak and a very weird chick...

If this is for real, anyone who wants to keep playing online poker, UIEGA or not, better hope the Tilt folks settle this with a strict confidentiality provision. Yesterday. If they don't settle, Clonie can depose the whole lot of 'em. They would have to testify under oath about the corporate structure and its finances. If you think the 2+2 community would have a collective orgasm reading about these details, imagine how your local congressman would react. Recent developments regarding the enforeceability of the UIEGA aside, this could be a true death knell for online poker in the US, at least for the foreseeable future. Barry-O is not gonna come to the rescue here. I know there's much hate for FTP around here, with their support problems and opaque corporate structure, but believe me, you want it to stay that way.

I've read these forums for a while and never has something jolted me enough to post. This could be very interesting, but also very, very bad...

He runs an Enterprise car rental franchise, if I am remembering correctly...

I dont know about US contract law, but i can tell you for a fact under UK Contract law any agreement met by 2 parties verbally is legally binding by law so long as each party has grounds to have understood the terms and conditions fully.

That is very true, but this is NVG lets bash Clonie now!

You're not.