Musings on Markets

FEBRUARY 8, 2022

In the first few weeks of 2022, we have had repeated reminders from the market that risk never goes away for good, even in the most buoyant markets, and that when it returns, investors still seem to be surprised that it is there.

Risk Premium 92

Risk Premium Beta Start-ups Equity 92

Musings on Markets

JULY 22, 2021

Zomato, an Indian online food-delivery company, was opened up to public market investors on July 14, 2021, and its market debut is being watched for clues by a number of other online ventures in India, waiting in the wings to go public.

Marketability 99

Marketability Start-ups Equity Price to Book 99

Equidam

APRIL 26, 2025

This approach encourages dialogue focused on the business fundamentals the team, the market opportunity, the product, the financial projections rather than anchoring the conversation to arbitrary figures potentially derived from selectively chosen, and often inappropriate, market comparisons.

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

ThomsonReuters

MAY 6, 2021

An entity may draw from its own experience as well as that of its peers, industry, geography, market, or other pertinent source. The adjustment added to the risk-free rate to arrive at the risk-adjusted rate is often referred to as the “risk premium.” Understanding the Calculation and the Output.

Discounted Cash Flow 52

Discounted Cash Flow Risk-free Rate Risk Premium Intangible Assets 52

Equilest

JANUARY 7, 2025

A wide range of techniques, such as the asset-based strategy, market approach, and income approach, have been employed by analysts. For example, the market technique compares the company to similar enterprises that have previously been sold, whereas the income approach may involve determining the present value of future cash flows.

Business Valuation 40

Business Valuation Risk Premium Finance Start-ups 40

Musings on Markets

NOVEMBER 9, 2021

I have been writing about, and valuing, Tesla for most of its lifetime in public markets, and while it remains a company that draws strong reactions, it is also one that I truly enjoy valuing. Tesla: The Back Story I first valued Tesla in 2013 , as a "luxury automobile company" and I have valued almost every year since.

Start-ups 101

Start-ups Dividends Marketability Market Capitalization 101

Musings on Markets

JANUARY 26, 2023

My last valuation of Tesla was in November 2021, towards its market peak, and given its steep fall from grace, in conjunction with Elon Musk's Twitter experiment, it is time for a revisit.

Start-ups 99

Start-ups Marketability Risk Premium Equity 99

Musings on Markets

JANUARY 6, 2023

Counter made-up numbers : It remains true that people (analysts, market experts, politicians) often make assertions based upon either incomplete or flawed data, or no data at all. Data universe : In my sample, I include all publicly traded firms with market capitalizations that exceed zero, traded anywhere in the world.

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Musings on Markets

JANUARY 9, 2021

I spent the first week of 2021 in the same way that I have spent the first week of every year since 1995, collecting data on publicly traded companies and analyzing how they navigated the cross currents of the prior year, both in operating and market value terms. Are US companies more levered than they were a decade ago?

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Equity 82

Equity Book Value Start-ups Corporate Finance 82

Musings on Markets

MAY 24, 2021

As we approach the mid point of 2021, financial markets, for the most part, have had a good year so far. All of these measures, no matter how carefully designed, give a measure of inflation in the past, and markets are ultimately concerned more with inflation in the future.

Treasury 55

Treasury Start-ups Risk Premium Price to Book 55

Equilest

JUNE 10, 2023

It helps owners determine the fair market value of their business, which is essential when considering a sale, merger, or acquisition. Market Conditions and Industry Trends Evaluating the current market conditions and industry trends is critical in assessing the value of a tax preparation business.

Business Valuation 40

Business Valuation Fair Market Value Marketability Technology 40

Musings on Markets

FEBRUARY 15, 2023

Some of that variation can be attributed to different mixes of businesses in different regions, since unit economics will result in higher gross margins for technology companies and commodity companies, in years when commodity prices are high, and lower gross margins for heavy manufacturing and retail businesses.

Start-ups 52

Start-ups Equity Risk Premium Risk-free Rate 52

Appraisal Rights

JUNE 5, 2017

The various problems facing the company led the court to embrace the respondents’ theory that SWS would continue to face an uphill climb given its relatively small size, which prevented it from scaling its substantial regulatory, technological, and back-office costs. Hilltop’s Influence on the Sale Process Rendered Merger Price Unreliable.

Beta 40

Beta Risk Premium Capital Structure Discounted Cash Flow 40

Equilest

JUNE 13, 2023

Geographic Location and Market Demand The geographic location of a disaster restoration business plays a significant role in its valuation. The local market dynamics, competition, and potential for future growth are crucial factors to consider when valuing a business. The total value of these assets forms the basis for the valuation.

Business Valuation 40

Business Valuation Asset-based Approach Appraisal Intangible Assets 40

Musings on Markets

JANUARY 12, 2021

I take the point of view that uncertainty should not stop you from valuing companies, that your value estimates will have more error in them, but since the market also faces the same uncertainty, your best bargains may be in the midst of uncertainty. That tells me three things.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

JANUARY 27, 2021

In my last post , I described the wild ride that the price of risk took in 2020, with equity risk premiums and default spreads initially sky rocketing, as the virus led to global economic shutdowns, and then just as abruptly dropping back to pre-crisis levels over the course of the year. against developed market currencies.

Start-ups 52

Start-ups Marketability Equity Treasury 52

Appraiser Newsroom

JUNE 4, 2024

Kevin holds an MBA in finance from Georgia State University and a Bachelors in Chemical Engineering from the Georgia Institute of Technology. He is the Director of the Pepperdine Private Capital Markets Project (privatecap.org) and Executive Director for the Pepperdine Most Fundable Companies competition (pepperdine.edu/mfc).

Business Valuation 59

Business Valuation Intangible Assets Appraisal Finance 59

Musings on Markets

JANUARY 19, 2022

If equity markets surprised us with their resilience in 2020, not just weathering a pandemic for the ages, but prospering in its midst, US equity markets, in particular, managed to find light even in the darkest news stories, and continued their rise through 2021. The year that was.

Risk Premium 99

Risk Premium Risk-free Rate Start-ups Equity 99

Musings on Markets

JANUARY 28, 2024

In my last data updates for this year, I looked first at how equity markets rebounded in 2023 , driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound.

Risk Premium 121

Risk Premium Beta Start-ups Equity 121

Musings on Markets

MARCH 19, 2022

As the world's attention is focused on the war in the Ukraine, it is the human toll, in death and injury, that should get our immediate attention, and you may find a focus on economics and markets to be callous. The increase in default spreads was not restricted to foreign markets, as fear also pushed up spreads in the corporate bond market.

Start-ups 100

Start-ups Risk Premium Equity Market Capitalization 100

Musings on Markets

JANUARY 8, 2022

To start the year, I returned to a ritual that I have practiced for thirty years, and that is to take a look at not just market changes over the last year, but also to get measures of the financial standing and practices of companies around the world. Happy New Year, and I hope that 2022 brings you good tidings!

Risk Premium 99

Risk Premium Start-ups Market Capitalization Corporate Finance 99

Musings on Markets

MARCH 25, 2021

The first quarter of 2021 has been, for the most part, a good time for equity markets, but there have been surprises. The Interest Rates Story To me the biggest story of markets in 2021 has been the rise of interest rates, especially at the long end of the maturity spectrum.

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Musings on Markets

FEBRUARY 27, 2023

Note that this framework applies for all businesses, from the smallest, privately owned businesses, where debt takes the form of bank loans and even credit card borrowing and equity is owner savings, the largest publicly traded companies, where debt can be in the form of corporate bonds and equity is shares held by public market investors.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

MAY 3, 2025

I started the month on a trip to Latin America, just as the tariff story hit my newsfeed and the market reacted with a sell off that knocked more than $9 trillion in market cap for global equities in the next two days. Focusing just on US equities, technology companies, which accounted for 29.4%

Marketability 95

Marketability Start-ups Treasury Risk Premium 95

Equidam

MAY 14, 2025

Categorisation poses a significant challenge in startup valuation, with investors and founders frequently mixing up markets, business models, industries, and underlying technologies. Equidam Category List ) Development Stage (Intrinsic Risk Factors) Development Stage focuses on intrinsic risk factors tied to the startups maturity.

Risk Premium 64

Risk Premium Risk-free Rate Beta Market Risk 64

Musings on Markets

APRIL 20, 2025

When markets are in free fall, there is a great deal of advice that is meted out to investors, and one is to just buy the dip , i.e., buy beaten down stocks, in the hope that they will recover, or the entire market, if it is down. The evidence for this strategy comes from many sources.

Start-ups 136

Start-ups Price to Book Marketability Equity 136

Musings on Markets

FEBRUARY 23, 2025

Corporate control : There are companies that choose to borrow money, even though debt may not be the right choice for them, because the inside investors in these companies (family groups, founders) do not want to raise fresh equity from the market, concerned that the new shares issued will reduce their power to control the firm.

Equity 77

Equity EBITDA Risk Premium Gross Debt 77

Musings on Markets

JANUARY 31, 2025

For those of you who have been tracking the market, the AI segment in the market has held its own since September, but even before the last weekend, there were signs that investors were sobering up on not only how big the payoff to AI would be, but how long they would have to wait to get there.

Start-ups 134

Start-ups Marketability Technology Risk Premium 134

Musings on Markets

MARCH 15, 2025

Thus, my estimates of equity risk premiums, updated every month, are not designed to make big statements about markets but more to get inputs I need to value companies. Many of these hiring firms have supply chains that stretch across the world and sell their products and services in foreign markets.

Start-ups 132

Start-ups Risk Premium Marketability Equity 132

Equidam

APRIL 22, 2025

Communicating Future Potential Section 3: Riding the Waves: The Influence of Markets Section 4: The Goal of Valuation: Building Investor Confidence Section 5: The Founder’s Valuation Playbook Section 6: Bridging the Gap: Founder, Investor, and Advisor Perspectives Section 1: What is Startup Valuation? 11] [13] Internal/Compliance (e.g.,

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52

Equidam

APRIL 22, 2025

S ection 3: What Influence Do Markets Have on Startup Valuation? Valuing startups relies heavily on assumptions about future performance, interpretations of market trends, and the specific perspectives and risk appetites of the involved parties. [3] This exploration will cover: Section 1: What is Startup Valuation?

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64