From the Editor

Abstract

I hope this issue finds you and your families all safe and well during this pandemic. I am very honored with the appointment to editor of the Business Valuation Review. I would like to thank Ken Pia and the Business Valuation Committee for this opportunity. I would also like to thank Victor Jarosiewicz, Roger Grabowski, and Jay Fishman, all past editors, who have coached me and without whom this issue would not be possible. Thanks to Allyson King as well for continuing as Managing Editor and providing so much support through the last few months. My thanks would not be complete without a proper thank you to the editorial review board members and the reviewers that you see on the inside cover of this journal. Before taking on this role, I did not fully appreciate the extent of the Business Valuation Review's double-blind review process and the detail to which our reviewers vet submitted manuscripts. Our reviewers are some of the best and brightest in the profession and reviews are completed in a thorough and professional manner. Our reviewers provide insightful comments to authors based on their own training, research and experiences and provide the comments and insights that lead to an outstanding final product. This issue continues a much-heated debate over total beta and the size premium. I thank Keith Butler, Roger Grabowski, and Anas Aboulamer for their insightful perspectives on the topics. Also, thanks to Joseph Thompson and David Neuzil who provide a framework for testing terminal values which can lead to significant valuation errors.The last several months have brought us extraordinary change, some good, some bad. My condolences go out to all those who have lost friends or family or have otherwise been affected by Covid-19. The current pandemic has changed so much… I live in New Jersey and performed a management interview on March 16. My children's schools were already closed, and they were being instructed remotely. All NJ bars and restaurants were closed effective 8 pm that evening, and I have not performed an on-site management interview since then. By Monday, March 23, the S&P 500 index dropped to a low, down over 30% from December 31, 2019. Many were under mandatory stay at home orders by the end of March. We saw unemployment spike to its highest levels since the Depression, while many local businesses were shuttered. We have seen a resurgence in the stock market indices, but not all businesses have recovered the same way. Zoom (ticker ZM), which has been an amazing tool throughout this pandemic for meetings, interviews, depositions and trials, has seen its stock price soar over 500%, while local restaurants and gyms in my area remained closed and have just opened for inside services in the last few weeks. The pandemic has clearly affected all businesses, but not the same way.I recently saw a meme that read, “the first rule of 2021 is… you don't talk about 2020,” a reference to the 1999 film Fight Club. It may be nice to forget much of what has happened over the last six months, but regardless of our feelings, Covid-19 has had and is going to continue to have a significant impact on the way businesses operate, and in turn, the way we value them. So many factors will affect our valuations, like capacity limitations, state, local and federal regulations, the Payroll Protection Act and the impact of loan forgiveness, any further economic stimulus, and perhaps the risk of additional waves. Our objective at the Business Valuation Review is to:So much has changed in our world in such a short period of time. Much of this change will affect the way we as a profession work and do our work. I would like to make a call out to all the authors and would-be authors reading this to share their thoughts, theories and industry-specific case studies that may be of interest to us all and would contribute to our body of knowledge as a profession. When I started in this business, I read Shannon Pratt's Valuing a Business and the like, which provided a fantastic framework for valuing any business. However, I found myself turning to the Business Valuation Review when I had a novel type of business or perhaps a special situation where art or experience was required to compensate when science fell short. The current economic environment is full of such areas, and I would love to publish articles in these areas in future issues of the Business Valuation Review. Please enjoy the articles in this issue and consider submitting articles that may contribute to the practice of business valuation.Be well,Kyle Garcia