Are you aware there was a 9 year gap between the purchase of Rocawear and when the reported value of it plummeted?
I've never laundered money, but I'd imagine a 9 year wait isn't what people are looking for.
Jay-Z is being investigated by the SEC over $200m Rocawear sale to ICONIX
- Thread starter ☑︎#VoteDemocrat
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I've never laundered money, but I'd imagine a 9 year wait isn't what people are looking for.
panopticon
Superstar
Nah, not money laundering.
Jay had a marketing/promotion partnership with Iconix after he sold them Rocawear.
Which means he had experience with the executives that were running the show throughout the period of accounting "irregularities" (stolen money).
They want him to testify about his experiences and hope he'll say something even the slightest bit negative about his experiences with them.
Again, Jay isn't the target of the investigation. His testimony will be a tool in the hands of the SEC (and later, federal prosecutors if it gets that far) to extract a favorable settlement from former Iconix executives, or convict them of whatever financial crimes are uncovered by the ongoing investigation.
Lets be honest....$200million for Rocawear in 2007 ...was a LOT of money. No matter how you cut it.
I never knew the brand was worth that money even at its peak...Even adjusted for future growth potential
panopticon
Superstar
Nah it made perfect sense (at least within the context of that time).
The financing environment was unbelievably loose, so asset prices across the board were super-inflated.
Apparel companies like Rocawear (were) simple operations: cheap shyt manufactured by Bangladeshi or Vietnamese factories with workers earning slave wages (especially back then), imported to the US tariff-free, riding the pre-existing record label investment in marketing & promotion of the artist representing the brand, and distributed through major retailers at sky-high prices.
The free cash flow generated by Rocawear, Sean John, and other similar brands was unbelievable back then. Remember, this is all well before the financial crisis, Amazon's domination, the ongoing retail collapse, etc. And when the company was sold, the purchase price was agreed upon with the assumption that those cashflows would continue - and even increase into the future.
The price seems ridiculous to us now because we're in a completely different environment. But in 2007, people were flooding malls by the millions, ready to shell out $35 for a branded Rocawear t-shirt on their Macy's credit card.
At that time it was generating $700 million in revenue annually.
What do you think the actual value of Rocawear was and why?
you're right...you're very right....Nah it made perfect sense (at least within the context of that time).
The financing environment was unbelievably loose, so asset prices across the board were super-inflated.
Apparel companies like Rocawear (were) simple operations: cheap shyt manufactured by Bangladeshi or Vietnamese factories with workers earning slave wages (especially back then), imported to the US tariff-free, riding the pre-existing record label investment in marketing & promotion of the artist representing the brand, and distributed through major retailers at sky-high prices.
The free cash flow generated by Rocawear, Sean John, and other similar brands was unbelievable back then. Remember, this is all well before the financial crisis, Amazon's domination, the ongoing retail collapse, etc. And when the company was sold, the purchase price was agreed upon with the assumption that those cashflows would continue - and even increase into the future.
The price seems ridiculous to us now because we're in a completely different environment. But in 2007, people were flooding malls by the millions, ready to shell out $35 for a branded Rocawear t-shirt on their Macy's credit card.
panopticon
Superstar
Check out page 17 of this PDF
http://www.ey.com/Publication/vwLUA...l-and-consumer-products-industry-may-2017.pdf
Retail (including apparel companies) transaction multiples averaged 9.4x EV/EBITDA in 2007.
We can assume Rocawear carried little to no debt- so the $200 million acquisiton price equals the enterprise value at the time.
A $200 million transaction price would imply a $200 million / 9.4 = $21.3 million in EBITDA in 2007 if the deal was done at the average transaction multiple for the year.
$21.3 million in EBITDA on $700 million in retail sales (implying around $200-$250 million in actual revenue to Rocawear due to the difference between wholesale pricing to retailers and the prices paid by consumers) is extremely easy to accomplish - that's a 9-11% EBITDA margin!
If anything, Jay-Z may have gotten too little for Rocawear...not an inflated price.
Here's the deal press release:
Jay-Z Cashes in With Rocawear Deal
$204 million in cash up-front plus $35 million in Iconix stock if Rocawear hit certain targets over the following 5 years...and it was purely a licensing play, Jay-Z still maintained control of the Rocawear operating company which included the manufacturing operations.
All checks out from where I'm standing
Hold this dap and rep. :psalute:Check out page 17 of this PDF
http://www.ey.com/Publication/vwLUA...l-and-consumer-products-industry-may-2017.pdf
Retail (including apparel companies) transaction multiples averaged 9.4x EV/EBITDA in 2007.
We can assume Rocawear carried little to no debt- so the $200 million acquisiton price equals the enterprise value at the time.
A $200 million transaction price would imply a $200 million / 9.4 = $21.3 million in EBITDA in 2007 if the deal was done at the average transaction multiple for the year.
$21.3 million in EBITDA on $700 million in retail sales (implying around $200-$250 million in actual revenue to Rocawear due to the difference between wholesale pricing to retailers and the prices paid by consumers) is extremely easy to accomplish - that's a 9-11% EBITDA margin!
If anything, Jay-Z may have gotten too little for Rocawear...not an inflated price.
Here's the deal press release:
Jay-Z Cashes in With Rocawear Deal
$204 million in cash up-front plus $35 million in Iconix stock if Rocawear hit certain targets over the following 5 years...and it was purely a licensing play, Jay-Z still maintained control of the Rocawear operating company which included the manufacturing operations.
All checks out from where I'm standing
I'm just a personal injury lawyer so this shyt is a little too
for me :prodigylol:
I'll let you have the floor :prodigylol2:
panopticon
Superstar
Hold this dap and rep. :psalute:
I'm just a personal injury lawyer so this shyt is a little too
for me :prodigylol:
I'll let you have the floor :prodigylol2:
A nikka said the SEC needs to ask Jay-Z about the 92 bricks. I'm fukking weak 
panopticon
Superstar
A nikka said the SEC needs to ask Jay-Z about the 92 bricks. I'm fukking weak
DirtyMoney
Banned
You smart. Need you on the team. PM.Check out page 17 of this PDF
http://www.ey.com/Publication/vwLUA...l-and-consumer-products-industry-may-2017.pdf
Retail (including apparel companies) transaction multiples averaged 9.4x EV/EBITDA in 2007.
We can assume Rocawear carried little to no debt- so the $200 million acquisiton price equals the enterprise value at the time.
A $200 million transaction price would imply a $200 million / 9.4 = $21.3 million in EBITDA in 2007 if the deal was done at the average transaction multiple for the year.
$21.3 million in EBITDA on $700 million in retail sales (implying around $200-$250 million in actual revenue to Rocawear due to the difference between wholesale pricing to retailers and the prices paid by consumers) is extremely easy to accomplish - that's a 9-11% EBITDA margin!
If anything, Jay-Z may have gotten too little for Rocawear...not an inflated price.
Here's the deal press release:
Jay-Z Cashes in With Rocawear Deal
$204 million in cash up-front plus $35 million in Iconix stock if Rocawear hit certain targets over the following 5 years...and it was purely a licensing play, Jay-Z still maintained control of the Rocawear operating company which included the manufacturing operations.
All checks out from where I'm standing
