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And the other other half are undervalued then.
by tonmoy 9y ago
And the other other half are undervalued then.
- vm 9y agoIt's not a zero sum game. Company valuations are independent.
- deleted 9y ago[deleted]
- fullshark 9y agoBut can't you be only either undervalued or overvalued? There is a knife's edge at properly valued but seems like almost all companies are one or the other.
- twinkletwinkle 9y agoThe other half could be overvalued for other reasons.
- freshhawk 9y agoNope, because none of them are calculating valuations using their lowest priced shares are they?
- Powerofmene 9y agoThat would be true if 1 + 1 = 2 but stock pricing changes by the minute/day/good news/scandal/hiring/firing, etc. Some of their valuations may have been on the money for the minute that it was determined but so many factors come into play even a huge over-valuation could even out next week based on a great quarterly report or a contract signed or if the right CEO is hired on an otherwise adrift ship.
- tedunangst 9y agoYou could at least read the paper abstract instead of relying on the made up HN title... The actual claim is "almost one half (53 out of 116) lose their unicorn status when their valuation is recalculated". So, yes, if half lose unicorn status, then the other half do not lose their unicorn status. Is that really such a keen insight?
- jhanschoo 9y agoIf we assume a simplistic log-normal distribution over the valuations of startups, and overvaluation is exactly half, this would mean that as a whole, startups are overvalued (median<mean)
- luu 9y ago> And the other other half are undervalued then. You must be responding to the current HN title and not anything from the actual paper? This comment doesn't make any sense otherwise. The paper literally has an entire section titled "All unicorns are overvalued" (section 4.2) and figure 3 shows the distribution of overvaluations given their methodology.