Valuing a high-tech growth company: the case of EchoStar Communications Corporation

References

• Abel , A. and Eberly , J. 2002 . “ Investment and Q with fixed costs: An empirical analysis ” . In Working Paper , Northwestern University .
   Google Scholar
• Arnold , T. and Shockley , R. L. 2010 . Real options analysis and the assumptions of corporate finance: A non-technical review . Multinational Finance Journal , 14 ( 1/2 ) : 29 – 71 .
   Google Scholar
• Benninga , S. and Tolkowsky , E. 2002 . Real options – an introduction and an application to R&D valuation . The Engineering Economist , 47 ( 2 ) : 151 – 68 . (doi:10.1080/00137910208965030)
   Google Scholar
• Berger , P. , Ofek , E. and Swary , I. 1996 . Investor valuation of the abandonment option . Journal of Financial Economics , 42 ( 2 ) : 257 – 87 . (doi:10.1016/0304-405X(96)00877-X)
   Web of Science ®Google Scholar
• Business Week . 1999 . How do you read this crazy market? . Business Week , March 29.
   Google Scholar
• Black , F. and Scholes , M. 1973 . The pricing of options and corporate liabilities . The Journal of Political Economy , 81 ( 3 ) : 637 – 54 . (doi:10.1086/260062)
   Web of Science ®Google Scholar
• Bowman , E. H. and Hurry , D. 1993 . Strategy through the option lens: An integrated view of resource investment and incremental-choice process . Academy of Management Review , 18 ( 4 ) : 760 – 82 .
   Web of Science ®Google Scholar
• Bowman , E. H. and Moskowitz , G. T. 2001 . Real options analysis and strategic decision-making . Organization Science , 12 ( 6 ) : 772 – 7 . (doi:10.1287/orsc.12.6.772.10080)
   Web of Science ®Google Scholar
• Boyer , M. , Christoffersen , P. , Lasserre , P. and Pavlov , A. 2003 . “ Value creation, risk management and real options ” . In Burgundy report, Center for Interuniversity Research and Analysis on Organizations , University of Montreal .
   Google Scholar
• Bradley , D. J. , Clarke , J. and Cooney , J. Jr. 2009 . “ Does reputation mitigate analysts’ conflicts of interest? Evidence from recommendations ” . In Working Paper , University of South Florida .
   Google Scholar
• Brealey , R. A. , Myers , S. C. and Allen , F. 2011 . Principles of corporate finance , 10 , New York : McGraw-Hill .
   Google Scholar
• Brigham , E. F. , Gapenski , L. C. and Ehrhardt , M. C. 1999 . Financial management: Theory and practice , 9 , Orlando , FL : Dryden Press, Harcourt Brace College Publishers .
   Google Scholar
• Caballero , R. J. and Pindyck , R. S. 1996 . Uncertainty, investment and industry evolution . International Economic Review , 37 ( 3 ) : 641 – 62 . (doi:10.2307/2527445)
   Web of Science ®Google Scholar
• Clark , E. , Gadad , M. and Rousseau , P. 2010 . Investor valuation of the abandonment option: Empirical evidence from UK divestitures 1985–1991 . Multinational Finance Journal , 14 ( 3/4 ) : 291 – 317 .
   Google Scholar
• Copeland , T. 2010 . From expected cash flows to real options . Multinational Finance Journal , 14 ( 1/2 ) : 1 – 27 .
   Google Scholar
• Copeland , T. and Howe , K. M. 2002 . Real options and strategic decisions . Strategic Finance , 83 ( 10 ) : 8 – 11 .
   Google Scholar
• Coy , P. 1999 . Exploiting uncertainty: The ‘real-options’ revolution in decision-making . Businessweek Online , June 7.
   Google Scholar
• Cunningham , C. R. 2006 . House price uncertainty, timing of development and vacant land prices: Evidence for real options in Seattle . Journal of Urban Economics , 59 ( 1 ) : 1 – 31 . (doi:10.1016/j.jue.2005.08.003)
   Web of Science ®Google Scholar
• Davis , G. D. 2002 . The impact of volatility on firms holding growth options . The Engineering Economist , 47 ( 2 ) : 213 – 31 . (doi:10.1080/00137910208965033)
   Google Scholar
• Deloof , M. , De Maeseneire , W. and Inghelbrecht , K. 2009 . How do investment banks value initial public offerings (IPOs)? . Journal of Business Finance and Accounting , 36 ( 1&2 ) : 130 – 60 . (doi:10.1111/j.1468-5957.2008.02117.x)
   Web of Science ®Google Scholar
• Demirakos , E. G. , Strong , N. C. and Walker , M. 2004 . What valuation models do analysts use? . Accounting Horizons , 18 ( 4 ) : 221 – 40 . (doi:10.2308/acch.2004.18.4.221)
   Google Scholar
• Demirakos , E. G. , Strong , N. C. and Walker , M. 2009 . Does valuation accuracy affect target price accuracy? . European Accounting Review , 19 ( 1 ) : 35 – 72 . (doi:10.1080/09638180902990630)
   Web of Science ®Google Scholar
• Dixit , A. K. and Pindyck , R. S. 1994 . Investment under uncertainty , Princeton : Princeton University Press .
   Google Scholar
• Dixit , A. K. and Pindyck , R. S. 1995 . The options approach to capital investment . Harvard Business Review , 73 ( 3 ) : 105 – 15 .
   Web of Science ®Google Scholar
• Glaum , M. and Friedrich , N. 2006 . After the bubble: Valuation of telecommunications companies by financial analysts . Journal of International Financial Management and Accounting , 17 ( 2 ) : 160 – 74 . (doi:10.1111/j.1467-646X.2006.00125.x)
   Google Scholar
• Gleason , C. A. , Johnson , B. and Li , H. 2009 . “ The earnings forecast accuracy, valuation model use, and price target performance of sell-side equity analysts ” . In Working Paper , University of Iowa .
   Google Scholar
• Graham , J. R. and Harvey , C. R. 2001 . The theory and practice of corporate finance: Evidence from the field . Journal of Financial Economics , 60 ( 2 & 3 ) : 187 – 243 . (doi:10.1016/S0304-405X(01)00044-7)
   Web of Science ®Google Scholar
• Grenadier , S. and Weiss , A. 1997 . Investment in technological innovation: An option pricing approach . Journal of Financial Economics , 44 ( 3 ) : 397 – 416 . (doi:10.1016/S0304-405X(97)00009-3)
   Web of Science ®Google Scholar
• Imam , S. , Barker , R. and Clubb , C. 2008 . The use of valuation models by UK investment analysts . European Accounting Review , 17 ( 3 ) : 503 – 35 . (doi:10.1080/09638180802016650)
   Web of Science ®Google Scholar
• International Herald Tribune . 1999 . Valuation puzzle for tech stocks . International Herald Tribune , April 22.
   Google Scholar
• Karsak , E. E. and Ozogul , O. C. 2002 . An options approach to valuing expansion flexibility in flexible manufacturing systems investment . The Engineering Economist , 47 ( 2 ) : 169 – 93 . (doi:10.1080/00137910208965031)
   Google Scholar
• Kemna , A. G.Z. 1993 . Case studies on real options . Financial Management , 22 ( 3 ) : 259 – 70 . (doi:10.2307/3665943)
   Web of Science ®Google Scholar
• Kenyon , C. and Cheliotis , G. 2002 . Dark fiber valuation . The Engineering Economist , 47 ( 3 ) : 264 – 308 . (doi:10.1080/00137910208965036)
   Google Scholar
• Kester , W. C. 1984 . Today's options for tomorrow's growth . Harvard Business Review , 62 ( 2 ) : 153 – 60 .
   Web of Science ®Google Scholar
• Kitabatake , Y. 2002 . Real options analysis of the Minami Alps forest road construction project . Environmental Economics and Policy Studies , 5 ( 4 ) : 261 – 90 .
   Google Scholar
• Lint , O. and Pennings , E. 2001 . An option approach to the new product development process: A case study at Philips Electronics . R&D Management , 32 ( 2 ) : 163 – 172 .
   Web of Science ®Google Scholar
• Loh , R. K. and Mian , G. M. 2006 . Do accurate earnings forecasts facilitate superior investment recommendations? . Journal of Financial Economics , 80 ( 2 ) : 455 – 83 . (doi:10.1016/j.jfineco.2005.03.009)
   Web of Science ®Google Scholar
• Luehrman , T. A. 1998 . Strategy as a portfolio of real options . Harvard Business Review , 76 ( 5 ) : 89 – 99 .
   PubMed Web of Science ®Google Scholar
• Mauboussin , M. J. 1999 . Get real: Using real options in security analysis. Credit Suisse First Boston, Equity Research . Frontiers of Finance , vol. 10 June.
   Google Scholar
• McDonald , R. L. 2000 . “ Real options and rules of thumb in capital budgeting ” . In Project flexibility, agency and competition: New developments in the theory and application of real options , Edited by: Brennan , M. J. and Trigeorgis , L. 13 – 33 . New York : Oxford University Press . chapter 2
   Google Scholar
• McGahan , A. 1994 . “ The incentive not to invest: Capacity commitments in the compact disc introduction ” . In Research on technological innovation, management and policy , Edited by: Rosenbloom , R. S. and Burgelman , R. A. vol. 5 , Greenwich : JAI Press .
   Google Scholar
• McGrath , R. G. and MacMillan , I. C. 2000 . Assessing technology projects using real options reasoning . Research Technology Management , 43 ( 4 ) : 35 – 49 .
   Web of Science ®Google Scholar
• Miller , L. T. and Park , C. S. 2002 . Decision making under uncertainty – real options to the rescue? . The Engineering Economist , 47 ( 2 ) : 105 – 50 . (doi:10.1080/00137910208965029)
   Google Scholar
• Moel , A. and Tufano , P. 2002 . When are real options exercised? An empirical study of mine closings . Review of Financial Studies , 15 ( 1 ) : 35 – 64 . (doi:10.1093/rfs/15.1.35)
   Web of Science ®Google Scholar
• Nichols , N. A. 1994 . Scientific management at Merck; an interview with CFO Judy Lewent . Harvard Business Review , : 89 – 99 . (January/February)
   Google Scholar
• Paddock , J. L. , Siegel , D. R. and Smith , J. L. 1988 . Option valuation of claims on real assets: The case of offshore petroleum leases . Quarterly Journal of Economics , 103 ( 3 ) : 479 – 508 . (doi:10.2307/1885541)
   Web of Science ®Google Scholar
• Park , C. S. 2002 . Real options-strategic planning under uncertainty. Special issue . The Engineering Economist , 47 ( 2: 1 ) (editorial)
   Google Scholar
• Porter , M. E. 1979 . How competitive forces shape strategy . Harvard Business Review , 57 ( 2 ) : 137 – 45 .
   Web of Science ®Google Scholar
• Porter , M. E. 1980 . Competitive strategy , New York : Free Press .
   Google Scholar
• Porter , M. E. 2008 . The five competitive forces that shape strategy . Harvard Business Review , 86 ( 1 ) : 79 – 93 .
   Web of Science ®Google Scholar
• Quigg , L. 1993 . Empirical testing of real option-pricing models . Journal of Finance , 48 ( 2 ) : 621 – 40 . (doi:10.1111/j.1540-6261.1993.tb04730.x)
   Web of Science ®Google Scholar
• Ryan , P. A. and Ryan , G. P. 2002 . Capital budgeting practices of the Fortune 1000: How have things changed? . Journal of Business and Management , 8 ( 4 ) : 355 – 64 .
   Google Scholar
• Schwartz , E. S. and Moon , M. 2000 . Rational valuation of internet companies . Financial Analysts Journal , 56 ( 3 ) : 62 – 75 . (doi:10.2469/faj.v56.n3.2361)
   Google Scholar
• Schwartz , E. S. and Moon , M. 2001 . Rational valuation of internet companies revisited . The Financial Review , 36 ( 4 ) : 7 – 25 . (doi:10.1111/j.1540-6288.2001.tb00027.x)
   Google Scholar
• Sick , G. and Gamba , A. 2010 . Some important issues involving real options: An overview . Multinational Finance Journal , 14 ( 1/2 ) : 73 – 123 .
   Google Scholar
• Smit , H. T.J. and Trigeorgis , L. 2004 . Strategic investment: Real options and games , Princeton : Princeton University Press .
   Google Scholar
• Smit , H. T.J. and Trigeorgis , L. 2010 . Flexibility and games in strategic investment . Multinational Finance Journal , 14 ( 1/2 ) : 125 – 51 .
   Google Scholar
• Smith , K. W. and Triantis , A. 1994 . “ The value of options in strategic acquisitions ” . In Real options in capital investment: Models, strategies, and applications , Edited by: Trigeorgis , L. 135 – 49 . Westport , CT : Praeger Publishers .
   Google Scholar
• Spencer-Young , J. and Durand , F. 2004 . Real option valuation of game lodge concessions . South African Journal of Business Management , 35 ( 1 ) : 27 – 34 .
   Google Scholar
• Teach , E. 2003 . Will real options take root? Why companies have been slow to adopt the valuation technique? . CFO Magazine , July 1.
   Google Scholar
• Teece , D. J. , Pisano , G. and Schuen , A. 1997 . Dynamic capabilities and strategies . Strategic Management Journal , 18 ( 7 ) : 509 – 33 . (doi:10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z)
   Web of Science ®Google Scholar
• Trigeorgis , L. 1990 . A real options application in natural resource investments . Advances in Futures and Options Research , 4 : 153 – 64 .
   Google Scholar
• Trigeorgis , L. 1995 . Real options in capital investment: Models strategies and applications , Westport , CT : Praeger Publishers .
   Google Scholar
• Trigeorgis , L. 1996 . Real options: Managerial flexibility and strategy in resource allocation , Cambridge , MA : MIT Press .
   Google Scholar
• Trigeorgis , L . 2005 . Making use of real options simple: An overview and applications in flexible/modular decision making . The Engineering Economist , 50 ( 1 ) : 25 – 53 . (doi:10.1080/00137910590917026)
   Google Scholar
• Trigeorgis , L. , Brosch , R. and Smit , H. 2007 . Stay loose: By breaking decisions into stages, executives can build flexibility into their plans . The Wall Street Journal, September 15 ,
   Google Scholar
• Venkatesan , C. P. 2005 . Real options = real value: Real options analysis accommodates uncertainty , Chicago , IL : A.T. Kearney .
   Google Scholar