[kortilla]

Stock has very little to do with “intrinsic value”. The share price is what an investor is willing to bet on the future of the company improving.

This is why companies with lousy future outlooks will sell for a lower price than their assets - debts.

There is no intrinsic value that private companies can stick to. They just have the power of controlling sales so they take sellers out of the market until they get the price they want at a volume they are comfortable with.

Stripe isn’t “intrinsically” worth anything that anyone will agree on. To one person it would be the cash in the bank minus liabilities. To someone else it would be a hefty multiple on that because they believe in the business.

[throwaway2037]

Yes, this is important. Stock price reflects future earnings growth potential. That's a mouthful(!), but consider if Google announced 0% growth in earnings, but still same profits. Their stock price would be crushed. This essentially happened to all major investment banks after 2008 crisis. When 30:1 leverage on balance sheet was no longer an option, forwarding looking earnings growth looked tiny compared to 2007.