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> I have been asked to appraise private stock for lenders and render an opinion around its volatility and liquidity. That must be a ton of fun. How do they in
by jpmattia 10y ago
> I have been asked to appraise private stock for lenders and render an opinion around its volatility and liquidity.
That must be a ton of fun. How do they incentivize you and your operation to be conservative? Because they presumably only make money if you hit the number, which was the big problem with home appraisers in the housing bubble.
They only way I can think of to cause correct behavior would be to ensure that your operation maintains an interest in the loan after the deal is done.
- JumpCrisscross 10y agoI do think it is fun! My firm works with companies and their shareholders. Issuing a letter to a lender is something I do for clients as a professional courtesy. I receive no special compensation in connection with it, and strongly prefer to mark assets to market (i.e. the last comparable trade or fundraising event) over model. The contents are less "this is where you should mark this asset" and more "this is where others have marked it, the circumstances under which they did so and how those circumstances may differ from this situation". The value isn't in providing a "right" number as much as turning a zero-information situation into an information-positive one.
- roymurdock 10y ago> The value isn't in providing a "right" number as much as turning a zero-information situation into an information-positive one This should be the slogan for all market research companies. Good way to look at it.