[dmitriid]

To be consistent over time you'd need some tool to objectively measure these valuations. No such tools exist, as everything is smoke and mirrors.

Magic Leap was estimated to be worth 4.6 billion dollars in 2016. It produced literally nothing for the next three years, and ended up producing a mediocre device with no future.

Nikola Corporation was valued at 13 billion dollars as recent as August 2020. They have literally no single product, and there are reports now that they entire company is an extensive fraud.

Uber is valued at anywhere between 30 and 70 billion dollars. It has never been profitable in all of its 11 years, losing up to 8.5 billion dollars a year of investor money going as far as to say "we may never be profitable" in its IPO filing.

And yet, here we are.

[marcinzm]

This all matters to an employee why exactly? Objective measures have what value? An objective measure that no one is selling or buying at is toilet paper. Thus the only measure that matters is the market. If the fair value estimate is in line with the market (in case of IPO, sale, etc.) or higher than that is good enough for employee stock buy back. Note that the FMV doesn't need to be equal to the market in this case, it can be higher. In all your examples that was the case so I don't see the problem.

[dmitriid]

> This all matters to an employee why exactly?

Let's re-read the original question: "How is “fair market” valuation determined for non-public companies?"

The valuation is done using nothing but reading tea-leaves. If we somehow spin this to "This all matters to an employee why exactly", then why not evaluate every single company to be at least 1 billion dollars, this will surely benefit the employees.

> An objective measure that no one is selling or buying at is toilet paper. Thus the only measure that matters is the market.

On objective measure that no one is selling or buying is still an objecive measure. Tea leaves, smoke and mirrors is not really called a market, but "the forming of a theory or conjecture without firm evidence." aka speculation.

> If the fair value estimate is in line with the market (in case of IPO, sale, etc.) or higher than that

Oh look, we've come back to the original question: "How is “fair market” valuation determined for non-public companies?" So, how is it determined?

> Note that the FMV doesn't need to be equal to the market in this case, it can be higher. In all your examples that was the case so I don't see the problem.

When "Fair market value" is not determined to be and actual fair market value, then it's not "fair market value". It's a lie. Too bad you don't see a problem with that.

[skinnymuch]

Your post is very biased and imo misleading.

Nikola is worth close to $13B right now. It’s a bit above $12B. Why mention August 2020? You mention the recent stock drop cause of fraud allegations, but leave out that it is still at that market cap because it rose 49% earlier in the week when GM invested $2B for an 11% stake and is partnering with them still.

Your Uber valuation numbers are misleading as well. Uber was worth below $45B for a short 4 weeks in mid March to mid April when much of the stock market was down. Otherwise in the past 1.5 years it has actually been between $45B and $80B.

None of this changes anything. I don’t see why the numbers and data need to be presented slanted.

[dmitriid]

> Nikola is worth close to $13B right now.

This worth is based on what exactly?

> Why mention August 2020?

That was their most recent valuation.

> Your Uber valuation numbers are misleading as well. Uber was worth

You concentrate on numbers in my post and completely miss the point of my post. Uber has lost 20 billion dollars in 11 years of its existence, it has never turned a profit, warned its investors it would probably never turn a profit. It would fold within a day without unlimited investor money. They needed to burn through at least 22.5 million dollars a day in 2019 just to stay afloat. In what world is such a business worth anything but 0 dollars?

> None of this changes anything. I don’t see why the numbers and data need to be presented slanted.

There's nothing slanted in my presentation of data and numbers.

[skinnymuch]

How was Nikola last valued in August? They’re public.

What are you basing the worth and values on? It appears we both were using value/worth to talk about market cap.

How is there nothing slanted about the numbers when the Uber Market cap numbers aren’t correct? You’re lowballing it. And still seeing what you meant by Nikola August valuation being the last time.