Hmm, not really. It kind of depends on how effective a marketplace we think the VC world is. We cannot complain it is overheated and bubble like, and then say it is leading to valuations less than its true value.
So, from my small knowledge of these things there are three means to value a publicly listed stock - (discounted) free cash flow, (discounted) dividend returns and earnings multiple. All of which assume you have perfect future knowledge of the total returns to holding the given asset and allow you to then price the asset today.
So using your example, let's say it is Google's IPO day and they are selling x shares at a total value of 10bn (whatever it was). If you have a copy of the FT from 2015 and it says google has made 300bn dollars in dividend payments to date, and then ceased trading for the Lulz -then you can confidently price the discount on those dividend payments (what you get for buying the asset) and then pay upto that amount in the IPO. Your profit comes from knowing the true value of holding google stock until 2015 as opposed to every other investors knowledge (who probably were a lot more conservative)
If everyone had that copy of the FT, then the price of the stock would on IPO exactly match the (discounted) return from the dividend payouts (well there are a lot of caveats here)
If another copy falls through time and says "oh, 300bn, we meant 30bn" then your estimate changes again.
So, in an ideal marketplace, all the participants know all the future events to come, can then workout current asset price and then pay upto that amount for the asset.
The only profit investors can make is if a) the market is unfair (barriers to entry, reduced knowledge etc) or b) by thinking they have more accurate estimates of future then the rest of the market (ie time wormholes near FT newspapers)
So - there is simply no way a competitive market will leave a gap between the current price and the "what everyone agrees will happen in the future" price. That's the definition of an unfair market.
Either way, airbnb is getting compared to companies like Ezpedia, but using their discounted cash flow and saying it is like airbnb is not taking into account the enormous legal and regulatory hurdles they are facing.
So, from my small knowledge of these things there are three means to value a publicly listed stock - (discounted) free cash flow, (discounted) dividend returns and earnings multiple. All of which assume you have perfect future knowledge of the total returns to holding the given asset and allow you to then price the asset today.
So using your example, let's say it is Google's IPO day and they are selling x shares at a total value of 10bn (whatever it was). If you have a copy of the FT from 2015 and it says google has made 300bn dollars in dividend payments to date, and then ceased trading for the Lulz -then you can confidently price the discount on those dividend payments (what you get for buying the asset) and then pay upto that amount in the IPO. Your profit comes from knowing the true value of holding google stock until 2015 as opposed to every other investors knowledge (who probably were a lot more conservative)
If everyone had that copy of the FT, then the price of the stock would on IPO exactly match the (discounted) return from the dividend payouts (well there are a lot of caveats here)
If another copy falls through time and says "oh, 300bn, we meant 30bn" then your estimate changes again.
So, in an ideal marketplace, all the participants know all the future events to come, can then workout current asset price and then pay upto that amount for the asset.
The only profit investors can make is if a) the market is unfair (barriers to entry, reduced knowledge etc) or b) by thinking they have more accurate estimates of future then the rest of the market (ie time wormholes near FT newspapers)
So - there is simply no way a competitive market will leave a gap between the current price and the "what everyone agrees will happen in the future" price. That's the definition of an unfair market.
Either way, airbnb is getting compared to companies like Ezpedia, but using their discounted cash flow and saying it is like airbnb is not taking into account the enormous legal and regulatory hurdles they are facing.