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/biz/ - Business & Finance

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1618258 No.1618258 [Reply] [Original]

can a business value themselves whatever they want? What are the consequences for saying your company is worth 1 trillion when filing for an IPO?

>> No.1618264

>>1618258

No one will buy your stock if it's overvalued

>> No.1618275

>>1618258
there are seed rounds before IPO's, essentially yes, but noone would believe that crap to actually take part in your company if you didn't deliver plausible evidence that the value could be 1 trillion. If you however patented a cure for cancer, then that would be plausible evidence for such a value estimate.

>> No.1618287

>>1618275
A cure for cancer ain't worth a trillion. It's worth a lot but unless it's part of a conglomerate and/or Shkreli is involved, you're still only looking at single, small double digit billions for IPO

>> No.1618319

No one wants to be part of a "down round".

This is what happens when an IPO goes at a certain valuation (say 1 trillion), banks/investors buy at that valuation (say 1 trillion), then the price drops like a rock on the open market to the real value (say 1 billion).

Yes, it is a Down's syndrome reference.