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by marcinzm
2100 days ago
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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. |
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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.