How John Malone Used EBITDA Correctly vs. How Valeant Pharmaceutical Abused It Instead
Enjoyed this article, thank you.
Of course this is correct, but I love Munger so much for saying that... and so much more.
Good article. Wouldn't looking at EBITDA-CAPEX solve most of the issues as R&D is either expensed or capitalized? Same for most other industries.
A lot of PEs that I know also look at EBITA instead of EBITDA as someone has indeed to pay for depreciation/capex (assuming D&A and Capex are in line over 5-y dcf horizon)
I haven't studied this deeply but I don't see the comparison to Bezos. Bezos never generated any FCF over his tenure... so all of the stock appreciation was on a promise (i.e. greater fool) not actual profit making... now AMZN is finally starting to generate FCF but for 22 years it failed to. I will go with Malone any day....