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Yes FOMO and cash looking for a home did help drive up valuations to irrational levels. Public markets are a different animal all together. There are some con
by cmiles8 5mo ago
Yes FOMO and cash looking for a home did help drive up valuations to irrational levels.
Public markets are a different animal all together.
There are some concerned there won’t be enough willing to invest. That is a real risk given people smell a bubble about to pop.
The other ironic risk is if the float is too small it creates an artificially high valuation by letting a thin, momentum-driven market price 100% of the cap table, which then collapses when lockups expire, supply floods in, and the real market discovers the stock is worth far less than the marginal buyers said it was.
For example there’s talk that in that scenario SpaceX could end up with a 5T valuation… for a company that did only $18.5B in revenue last year. Thats beyond irrational even under the most aggressive growth scenarios.
- JumpCrisscross 5mo ago> There are some concerned there won’t be enough willing to invest I say this as a former public-equity derivatives guy, and now a private capital markets guy: I'm not seeing this seriously argued. There is a real risk these companies are going out overvalued. But they're already overvalued in the private markets and arguably were even before near-term IPOs were on the horizon. Markets can go risk off for any reason. If they do between now and these companies' IPOs, that spoils the party. But if they don't, there is no reason to suspect the risk capital driving into all manner of speculative equities, to say nothig of structured products and weird debt creatures, is suddenly going to hold the line at the darlings of the private markets. > there’s talk that in that scenario SpaceX could end up with a 5T valuation Where?
- yytt32 5mo agoCurious. What would you consider a fair value? Would be interested to see your valuation approach