Leucadia Purchase of Jefferies Group (JEF) Confirms Model Price

Leucadia announced early this morning the purchase of Jefferies Group (JEF) for $17 per share, and more importantly confirming our calculation of model price as at Friday’s close of $17.19.

Here is Friday’s model price chart reproduced.

Jefferies Group with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

For those interested, a daily updated chart of JEF subsequent to this post will be maintained on Facebook, here.

Buyout deals, such as this one, where buyers and sellers come together and independently set what is considered fair market value confirms our model price math for individuals relying on our model price work.  We will highlight these deals as data points confirming our calculation of model price or fair market value for individual companies.  As time goes on and more deals are announced, like this one, readers will feel more comfortable with our calculations of fair market value.

Another interesting observation is that Jefferies was emerging from EBV-3, which readers of this blog know I call – “Coming out of the Blue” – investment strategy.  This investment strategy can be very profitable for investors and obviously this occurred in this circumstance.

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