Allbirds S-1 IPO

Re:Allbirds S-1 IPO by RC_ITR on Tuesday August 31, 2021 @03:27PM (#28372376)

The reason EBITDA became popular is because private equity firms had low cost of borrowing (e.g., they would manipulate I expense) and were good at financial engineering such that tax rates could easily become 0 in the short term. D and A are excluded because they’re not cash.

Then, people just sort of adopted EBITDA as shorthand for “FCF from operations” and then companies like Allbirds took advantage of that to do whatever they want with it.

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Re:Allbirds S-1 IPO by mbesto on Tuesday August 31, 2021 @04:57PM (#28373574)

> Then, people just sort of adopted EBITDA as shorthand for “FCF from operations”

Very true.

> then companies like Allbirds took advantage of that to do whatever they want with it.

Here's an insider secret - everyone manipulates Adj. EBITDA (not just "Allbirds like companies"). It's part of the game of business sellers, which is why buy-side auditing is so important to get right. This is more or less why public security analysts exist - to keep pressure on proper reporting from the company. If WeWork actually went public every analyst worth a salt would basically throw out their "Community Adjusted EBITDA" and the term would be rendered meaningless.

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