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JensG
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There is no such thing as a correct value.

There are different ways to calculate (read: guess) an anticipated value, but neither of them is the "correct" one. Last not least this depends on your interpretation of the term "correct" in that context.

  • Book value / value of oustanding shares
  • Discounted (future) cash flow
  • Value (which one?) of tangible and intangible assets
  • Anticipated future market share
  • and so on ...

Why do you think paid Facebook such a huge amount for WhatsApppaid Facebook such a huge amount for WhatsApp? Surely not, because it was the "correct" value.

There is no such thing as a correct value.

There are different ways to calculate (read: guess) an anticipated value, but neither of them is the "correct" one. Last not least this depends on your interpretation of the term "correct" in that context.

  • Book value / value of oustanding shares
  • Discounted (future) cash flow
  • Value (which one?) of tangible and intangible assets
  • Anticipated future market share
  • and so on ...

Why do you think paid Facebook such a huge amount for WhatsApp? Surely not, because it was the "correct" value.

There is no such thing as a correct value.

There are different ways to calculate (read: guess) an anticipated value, but neither of them is the "correct" one. Last not least this depends on your interpretation of the term "correct" in that context.

  • Book value / value of oustanding shares
  • Discounted (future) cash flow
  • Value (which one?) of tangible and intangible assets
  • Anticipated future market share
  • and so on ...

Why do you think paid Facebook such a huge amount for WhatsApp? Surely not, because it was the "correct" value.

Source Link
JensG
  • 169
  • 1
  • 5

There is no such thing as a correct value.

There are different ways to calculate (read: guess) an anticipated value, but neither of them is the "correct" one. Last not least this depends on your interpretation of the term "correct" in that context.

  • Book value / value of oustanding shares
  • Discounted (future) cash flow
  • Value (which one?) of tangible and intangible assets
  • Anticipated future market share
  • and so on ...

Why do you think paid Facebook such a huge amount for WhatsApp? Surely not, because it was the "correct" value.