By Madiha Gul – Equity Analyst
The founders of Priority Technology Holdings, Inc. announced a bid to take the company private on November 9, 2025. The deal was posed by the Chairman and CEO Thomas Priore who owns 58% of the company proposed a privatization offer at a price expected to range between $6 – $6.15 per share stating that the company is being undervalued by the market. The company is stable with a strong cash flow backing this special situation idea. The deal is still under authorized independent and disinterested director’s committee review. The bid is opposed by two activist investors, Buckley Capital & Steamboat Capital Partners. They argue that the offer undervalues the company and takes advantage of a mispricing of the common shares. One of these activist investors values the company at an estimated intrinsic value of $17 per share. However, there is no commitment or any assurances regarding the execution of the deal. The company has indicated that it does not intend to disclose any further details unless required by regulators and shareholders.
- NAV Calculation FY 2025
NAV = Total Assets – Total Liabilities / Shares outstanding
Total Assets = $22,171,000
Total Liabilities = $23,256,000
= -1,085,000
No of shares outstanding = 81,100,000
Net asset value (NAV) per share = – $0.0133
Discount/Premium
Current Share Price = $5.5
NAV = -$0.0133
Discount/Premium = ($5.5 / -$0.0133) – 1 = $-413.55 – 1 = -414.533 Approximately
Therefore, the company is selling at a huge premium related to its NAV
Using Benjamin Graham’s special situation formula to calculate expected (loss)/gain
- Indicated annual return = GC – L (100% – C)/YP
Where,
Let G be the expected gain in points in the event of success;
L be the expected loss in points in the event of failure;
C be the expected chance of success, expressed as a percentage;
Y be the expected time of holding, in years;
P be the current price of the security.
Let’s assume 60% probability of success due to privatization offer deal.
Indicated annual return
- Expected Gain
Gain = Expected future price – current price
($6.15 – $ 5.5) = $0.65
0.65 x 60% = 39
2. Possible loss
Let’s assume a 40% chance of loss
Loss= current price – possible Loss
=5.5 x 40%= $2.2
- x 40=88
- YP=1 x 5.5
Therefore,
Indicated annual return= 39-88=-49/1 x 5.5= -269.5 (Possible loss)
If only gains were to be considered then the indicated annual return would be:
6.15-5.5=$0.65/6.15=10.56%
Therefore, apparently the odds of losing are more than winning. Hence it’s not worth the risk in our opinion.
Other Key Metrics
Marketable Securities is $57 million includes cash and cash equivalent.
Cash Equivalents = 57 million / 81.1 million shares which gives $0.70 cash per share.
Total Debt per share is $12.31 per share which clearly shows that the debt level per share is far more than available cash per share.
Market Cap is $473.2 million and the company pays $0 Dividend
Conclusion
As a shareholder if you consider a $6 – $6.15 deal as an attractive bet then you believe in the company’s long-term potential or you believe the company recovering from its poor performance and may have a fair chance to ensure that the wait is worth the while. But for other looking for higher returns this deal may not be attractive or worth waiting. PRTH’s NAV shows a negative value indicating that the company’s liabilities are far more than its assets. Therefore, the NAV per share is negative and the stock is already trading at a premium. The leverage remains high due to a higher debt per share clearly exceeding the cash per share. PRTH pays no dividend and will have to retain all its future earnings and spending on future growth, rather than debt repayment or paying dividends which is not an attractive proposition to its shareholders in our opinion.
Disclaimer
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All opinions expressed are based on current analysis and are subject to change without notice. While we strive for accuracy, Moods Investment Research
makes no representation or warranty as to the completeness, accuracy, or reliability of any information provided. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.
Moods Investment Research and its founders, directors, or affiliates are not liable for any losses or damages arising from any reliance on the information provided.
The views expressed in this article are those of the author(s) and do not constitute investment advice. The author does not hold a position in Priority Holdings Inc. However, the author(s), including any editors or contributors (collectively referred to as “Moods and directors”), may or may not hold positions in other securities mentioned. Any such holdings are subject to change without notice.
Artificial intelligence (AI) technologies were used to support data processing, drafting, and/or analysis in this report. All conclusions and recommendations reflect the author’s independent judgment. While care has been taken to verify all information, neither the AI tools nor the authors guarantee accuracy or completeness. Therefore, whilst results derived from AI were reviewed for reliability; however, users should independently verify critical information.