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> Today, it's worth $175bn in the private market. Only theoretically. In practice, just because someone is willing to buy a completely insignificant stake (0.
by sgjohnson 3y ago
> Today, it's worth $175bn in the private market.
Only theoretically.
In practice, just because someone is willing to buy a completely insignificant stake (0.2%) for $500mn doesn’t make the entire company worth $175bn.
If anything, this is probably Elon and his friends pulling off an accounting trick.
I can register a company with a share capital of $1 and issue 1000000000000 shares with a nominal value of $0.000000000001 each. Then I could sell you one of those shares for $1 and then I could tell everyone that I’m a trillionaire. Which would technically be the truth.
- TheAlchemist 3y agoYeah, reminds me about this 100M deli. Been done before ! https://www.cnbc.com/2022/09/26/three-men-charged-with-fraud-in-100-million-new-jersey-deli-scheme.html https://www.cnbc.com/2022/09/26/three-men-charged-with-fraud...
- keiferski 3y agoThis is how every company is valued. The point is not that the company is literally valued for some exact amount of money, but how it compares to other companies’ valuations. Capitalism 101.
- Zigurd 3y agoThe parent post remains correct. An illiquid investment in a tiny percentage of a company is not a reliable measure for valuation. Any sophisticated investor would see it as a way of manipulating the price.