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

Bruno Fiesenig, Carolin Bock, Anna Khoroshylova and Dirk Schiereck

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

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.

Date: 2025-01-21
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Published in Journal of Business Valuation and Economic Loss Analysis 1 (2025-01-21) : pp. 29-48

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:157468

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