Late this week, the beauty industry was all aflutter about a news story that ran as an exclusive on SkyNews stating that SpaceNK's owner, Manzanita Capital, was looking for bankers to sell the retailer for up to £400 million ($506.4 million). The news quickly spread, with other outlets and beauty trade publications picking up the story and industry insiders speculating on LinkedIn where the company would end up. The news seemingly appeared out of thin air, catching even those of us who watch these things for a living by surprise, and it’s been fun imagining what’s next for the retailer—except for one small problem: none of it seems to make any sense. Here are a few things to consider about the news:The Story's Red Flags The most glaring red flag in the coverage of the story is the supposed valuation that Manzanita is seeking. Several pieces noted that SpaceNK's trailing 12-month (TTM) sales ended March 2023 were £146 million ($184.8 million) and EBITDA was £5.9 million ($7.4 million). Taking the data at face value—as a privately held company, none of this financial information is publicly available—a £400 million ($506.4 million) valuation would imply a deal at nearly 3x revenue and 68x EBITDA.First off, retailers don't often trade on revenue like brands do; they trade on EBITDA. And a TTM EBITDA multiple of 68x would be insane.