Merger Math? (TLRA/RUBI)

[Andrew Stepner]

How do I calc the merger math on this?:

"Stock-for-stock merger at an exchange ratio of 1.082 shares of Rubicon Project (NYSE:RUBI) common stock for each share of Telaria (NYSE: TLRA) common stock, with Telaria stockholders expected to own approximately 47.1% and Rubicon Project stockholders expected to own approximately 52.9% of the fully diluted shares of the combined company".

As in how do I calculate things like implied NewCo mkt cap, shares, share price, etc? And really what I am trying to figure is how do I calculate fair value of each one based on the trading price of the other?

I did some calcs but I want to make sure my math is right.

Source is from this fool pitch:

https://www.fool.com/investing/2020/01/01/my-top-stock-pick-and-biggest-holding-for-2020-and.aspx  

Stepner

[Andrew Stepner]

To close the loop, share count will be RUBI shares plus 1.082 * TLRA shares. Market cap is roughly the two market caps combined. So I think if they trade at relative equality then TLRA should trade at roughly 1.082 times the price of RUBI which is roughly how it is.

I am going to get long $TLRA after I wait a bit to try to buy at a lower price (the chart shows the price trending down a lot recently).

The Fool.com pitch linked below is really compelling to me. From the summary: "Long story short, I believe Telaria is the market's best avenue for investing in the confluence of two undeniable trends we will see in the new decade: the rise of programmatic advertising and the growth of connected TV. Investors have aggressively bought up The Trade Desk shares in recent years because they've recognized the compelling economics in buy-side ad tech. But the market hasn't quite figured out who will come out on top on the sell side. Therefore, there's still time to profit from buying Telaria stock before the masses realize the scale of this opportunity."

And "Notably, Telaria currently has a major competitive advantage when it comes to competition. Its two biggest sell-side CTV competitors are FreeWheel and SpotX, both of which have compromised value propositions to content publishers since they are owned by cable companies (a content publisher generally doesn't want to partner with a platform that is funding a competing content publisher)."

The idea is that the merger will give them scale and they will be positioned well. Meanwhile $TTD on the buy side trades at 21X sales. Whereas TLRA/RUBI is roughly 4X sales at present which seems quite cheap to me given the potential growth on sell-side CTV.

Stepner

Stepner

[Andrew Stepner]

I have had pretty good fortune with $MGNI (renamed from $TLRA after merger with $RUBI). I plan to hold as of now. However the good problem that I have now is sort of not knowing how long to hold or when to sell. I think I can have a tendency to sell too soon (I'm thinking of $AAPL, even though I held it for years I should have held for more years). So I'm inclined to keep $MGNI until something clearly negative happens with it. But it certainly has been a bit of a roller coaster with a big run up and then a sizeable pullback.

Stepner