Stock prices respond disproportionately to free float availability (or lack thereof) than to theoretical Excel valuations. The growth rate x float decides the PE multiple, that's why every co. can't be 15PE. A co. with just 10% float will deviate that much from its DCF valuation.
If there's 2 similar co.'s, one listed (with 15% float available to investors) vs another co. unlisted. The market will arrive (rightly so) at wildly divergent valuations for both. The second co.'s valuation is based on 100% ownership, while the 1st one on a limited supply basis.
If both were listed with 100% float available to free-market forces, or if both were unlisted, then one can do a side by side DCF, otherwise sharing social media infographics comparing stats of Nestle vs Amul, vs ITC without considering locked up float shows lack of wit.
This is why, self proclaimed geniuses came up with a valuation of 40rs for #Zomato and their चेले चपाटे went to town sharing 'valuation comparisons' of how Zomato is overvalued because so and so other companies are valued so and so
कौनसा गांजा फूंक रहे हो भाई, थोड़ा इधर भी भेजो
कौनसा गांजा फूंक रहे हो भाई, थोड़ा इधर भी भेजो
Same culprits are now roaming around saying..ohh no no our valuation wasn't wrong, it's these hippie robinhood teens who throw mad money at anything and take it up.
Seriously? do robinhoods have 1 lakh crore in spare cash lying around to pump into just 1 stock?
Seriously? do robinhoods have 1 lakh crore in spare cash lying around to pump into just 1 stock?
And if mad money is pumping up stocks, why isn't smart money slaughtering dumb ones and booking profits at their expense?
In reality, the smart money was a net buyer, the OVER-smart money stayed out because some value guru told them to, & now the grapes are sour, so "कल गिरेगा"
In reality, the smart money was a net buyer, the OVER-smart money stayed out because some value guru told them to, & now the grapes are sour, so "कल गिरेगा"
• • •
Missing some Tweet in this thread? You can try to
force a refresh
