The Biz of Coding

Irrational Analyst Valuations — Explained

by Ujwal Tickoo on October 2nd, 2006

Paul Kedrosky takes a dig at the recent 15 billion USD valuation of MySpace and explains why some analysts give mind boggling valuations. Simple. Attention Grabbing. Your sky-high valuation gets quoted in the media and gets talked about:

putting up oversized estimates of a company’s value is mostly a marketing move for a financial analyst, not an exercise in company valuation. The number doesn’t matter; it is simply a piece of red meat to attact the media pack, like me saying…that one of my portfolio companies is worth a billion dollars (which it is, of course). Come talk to me!

Pretending otherwise and writing rationally (or intemperately) about "look at me" numbers using logic, critical thinking, and financial sense is silly

Thank Paul for that humorous plain-speak on crazy valuations!

Yahoo Finance also quotes Phil Davis on Yahoo (YHOO), eBay (EBAY), and Google (GOOG). Yahoo! at approx $ 24.80 and eBay at approx $ 27.5 are undervalued and Google at around $ 401 is "window dressed" according to Phil.

POSTED IN: Google, Information Economy, Seriously Funny, Yahoo, eBay