There's a great podcast with Sam Altman discussing these "valuations" a couple of weeks back[0]. He describes how the valuations everyone talks about in the pr

There's a great podcast with Sam Altman discussing these "valuations" a couple of weeks back[0]. He describes how the valuations everyone talks about in the press often come from preferred stock financing rounds (ie: classes of stock which come with a caveat limiting both their upside and downside). As a result, the numbers betray what many people think to be the company's "valuation" come IPO time (Square, which possessed a 'ratchet' was an example of this apparently). As a result he said it's possible to largely disregard many of the stated "valuations" in the press for these $1bn+ companies as their financing rounds have been closer to debt than equity. One key upshot of this also was that people holding common stock (employees who have exercised options, e.g.) may be caught with their pants down as they made choices based on a stated valuation which differed from that of their shares. [0]: The Jay & Farhad Show: The Tech Industry: Tech Bubble or Tech Bust? https://overcast.fm/+DcD5EhUGs https://overcast.fm/+DcD5EhUGs