Sure, but whichever shareholders control the company, they ultimately want to profit from that ownership, right? So if the stock price isn't reflecting the true value of the underlying company, they're going to do something about it.
I suppose there are edge cases where they will instead attempt to profit by convincing the board to pay the CEO a trillion dollars, but even that kind of thing probably only flies if the stock price is also going up. (I wouldn't have thought to include that exception at all some years ago, but at least one salient example has proven this possible, if not likely.) So I could see a case for not trusting the valuation of companies that behave in that particular manner. Where the CEO is effectively the controlling shareholder, especially if they have shown a willingness and ability to inflate their own compensation.
The existing controlling shareholders would need to support the issuing of new shares. They would only choose to dilute their own holdings if it were advantageous to do so.
I suppose there are edge cases where they will instead attempt to profit by convincing the board to pay the CEO a trillion dollars, but even that kind of thing probably only flies if the stock price is also going up. (I wouldn't have thought to include that exception at all some years ago, but at least one salient example has proven this possible, if not likely.) So I could see a case for not trusting the valuation of companies that behave in that particular manner. Where the CEO is effectively the controlling shareholder, especially if they have shown a willingness and ability to inflate their own compensation.