Consider the Fintech and Information Services sector. Depending upon how you define it, the sector trades at approximately 30x Operating Cash Flow (“OCF”). If Company X generates $1 billion in Operating Cash Flow today, the Net Income input will have been taxed at 28% under Biden’s proposal vs. the current 21% Federal corporate income tax (33% higher). Thus, 1.) the valuation multiple will be applied to a lower OCF figure all else held equal, and 2.) investors likely will apply a lower valuation multiple given the higher tax and lower cash flows. It feels to me that this phenomenon is not baked into Tech valuations and perhaps equity valuations more generally.

• Asset Management
• Fintech
• Information Services
• Investing
• Software
• Technology