So the stock mentioned below is an illiquid trade. Anyway, for its IPO the Company was valued at 100x. Post-listing, as was the case with most companies in 2007, the stock zoomed to 150x in a matter of weeks. For that year, the Company made about 4.5% on its IPO market cap and 13% on its networth.
Four years hence, the Company is valued at 35-40x. The absolute profit for the year is about half that of the listing year, which I believe is an aberration due to circumstances and accounting entries.
Does the valuation make sense? Are people really able to understand the true potential of this company? And why do people, and therefore markets, behave the way they do? Can the Company go back to 12%+ on its networth? What is the size of the networth? What is my downside from here onwards!?
Four years hence, the Company is valued at 35-40x. The absolute profit for the year is about half that of the listing year, which I believe is an aberration due to circumstances and accounting entries.
Does the valuation make sense? Are people really able to understand the true potential of this company? And why do people, and therefore markets, behave the way they do? Can the Company go back to 12%+ on its networth? What is the size of the networth? What is my downside from here onwards!?
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