Valuation framework for new-economy companies
Reliable Valuation Framework for New Economy and Digital companies
This book is a comprehensive valuation guide to reliably value new economy, internet and technology companies. The author has more than a decade and a half’s experience in researching and successfully investing in new economy companies. This work is based on a large volume of academic papers and the usage of past valuation methods.
Investing has always been a difficult job. But the investment world has created valuation methods which have streamlined valuation processes. For more than a century the successful schools of thought have relied on established valuation methods for investing. These methods have worked beautifully and reliably across companies, industries and time periods to help investors ascertain business valuation and take remunerative investment actions.
All the established valuation methods have broken down one-by-one with the mass adoption of technology. Technology companies have made it extremely difficult for investors of the old school of thought to make reliable and informed investing decisions. This has led to colossal mistakes where the world-renowned stalwart investors missed out on investing in the tech space and have missed substantial part of the tech market cap growth. Even today, tech valuations are bucketed as "too tough to understand".
There is an impending need to understand the tech companies' valuations and develop a framework which can help investors reliably value them over various time periods and across industries. This book will make understanding valuations of tech companies simpler, not just subjectively, but quite objectively. This will provide analysts and investors with a framework to value technology companies. The age-old rush for information asymmetry in a conducive valuation environment is now being replaced with what I call as "Valuation Asymmetry". Information asymmetries no longer provide the kind of edge they used to provide in the past. Valuation asymmetries do.
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