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Probably due to „dilution“ where the number of shares is expanded, leading to lower value per share. I was surprised by this, too. It‘s perhaps the most import
by quonn 3y ago
Probably due to „dilution“ where the number of shares is expanded, leading to lower value per share.
I was surprised by this, too. It‘s perhaps the most important thing to know when working for startups or investing in them.
- blitzar 3y agoListed companies can and do this as well, typically not on a scale that is so noticeable.
- chii 3y ago> not on a scale that is so noticeable. it's more likely that the equity raised are deployed to produce more value than the "loss" due to dilution. For a startup, this might be harder, since the revenue is less clear, and thus the valuation is very inaccurate. For a mature/listed company, the revenue is much clearer and thus the valuation is more accurate.