Assessing the Fair Value of Unicorns Post-IPO: An Analysis of Applied Valuation Methods

Fiesenig Bruno (), Bock Carolin, Khoroshylova Anna and Schiereck Dirk
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Fiesenig Bruno: Department of Business Administration, Economics and Law, Technical University of Darmstadt, Hochschulstraße 1, 64289 Darmstadt, Germany
Bock Carolin: Department of Business Administration, Economics and Law, Technical University of Darmstadt, Hochschulstraße 1, 64289 Darmstadt, Germany
Khoroshylova Anna: Department of Business Administration, Economics and Law, Technical University of Darmstadt, Hochschulstraße 1, 64289 Darmstadt, Germany
Schiereck Dirk: Department of Business Administration, Economics and Law, Technical University of Darmstadt, Hochschulstraße 1, 64289 Darmstadt, Germany

Journal of Business Valuation and Economic Loss Analysis, 2025, vol. 20, issue 1, 29-48

Abstract: This study compares the market enterprise value of former unicorns to 10 individual calculated enterprise values based on the corresponding discounted cash flows and comparable company analyses. This research aims to investigate whether investors correctly perceive the valuation of unicorns. For our sample of 66 former unicorns entering capital markets between 2004 and 2019, we found that former unicorns appear to be undervalued in capital markets. Furthermore, we show that the accuracy of firm valuations increases with the amount of public information. Finally, we argue that Multiples are better suited for the assessment of a unicorn’s value once public.

Keywords: valuation; unicorn; discounted cash flow; comparable company analysis; value of firm (search for similar items in EconPapers)
JEL-codes: G12 G32 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/jbvela-2024-0018

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