You gotta love the boys at Lazard who figure that Bernard Madoff’s brokerage business might be worth about nine times earnings. Hope springs eternal!
Bernard Madoff’s brokerage, which is being sold to pay victims of his alleged $50 billion Ponzi scheme, may fetch no more than $10 million based on a profit report drawn up by investment bank Lazard Ltd.
Madoff’s institutional brokerage is being marketed to potential bidders. With earnings of just $1.12 million last year, according to Lazard, and a “tarnished” brand, the company may get an offer of eight times profit or fail to draw bids at all, said Larry Tabb, founder of TABB Group, a financial-market research and advisory firm…
The company employed about $90 million of capital during an average day, according to the Lazard documents obtained by Bloomberg News. Madoff is under guard and restricted to his apartment in Manhattan.
The brokerage’s proprietary trading unit, with net capital of as much as $250 million, lost $11 million last year, depressing the company’s profit from $8.76 million in 2007 and $41.4 million in 2006, Lazard said.
The brokerage paid employees excluding Madoff family members more than $7 million in 2008 and 2007 bonuses, the documents, presented in December to prospective buyers, show.