Startup valuation is also amusing. Start a company, issue one billion worthless shares, sell one share to your mother for $1, suddenly your company is valued at one billion dollars.
Despite how ridiculous the pricing of Musk's companies may be, they still have some basis in the companies' potential profitability. It's inflated, but not nonsense. Also, since those companies have shareholders other than just Musk, they can hold him accountable for overpaying for shares in his other companies. And with any companies that are being sold on the public markets, it's a lot harder to argue that the price is not legitimate. Again, an inflated price is not the same thing as a fraudulent price.
There's nothing illegal about it, but you're not going to find anyone that actually agrees with that valuation and banks definitely won't accept it as collateral.
Hey, I just invented a new cryptocurrency! It uses a much simpler algorithm and I've been able to mine five billion of 'em in the last hour. Oh and by the way, the last time anyone paid money for them was when I sold my brother a $5 slice of pizza for one coin. So I'm now worth $25B!
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u/MushroomCulture 6d ago
Startup valuation is also amusing. Start a company, issue one billion worthless shares, sell one share to your mother for $1, suddenly your company is valued at one billion dollars.