Everyone is perplexed as to what value anything holds nowadays. This week was another week where many startups started, many things increased in their prices, many decreased for various reasons. Someone is mispricing things, but who is mispricing who? It all depends on taste of course, if someone wants a cup of tea, that tea is valuable to them, they will get it for high price as long as they desire for it and this desire is exactly what is making people rich as well as mad.
Why does this happen? Bands are responsible for increase and decrease in values of businesses, but hold on, this is just a guess. There are three bands for companies. The first band is called “private capital cohort”, these are the people who gave a value to Affirm, per share, for 19.93 dollars, in the month of September, 2020. And they valued Roblox in February, 2020, at 4 billion dollars. Now, Affirm’s per share value is 116.58 dollars, and Roblox has increased its value to 29.5 billion dollars.
The second band is called the “public investing cohort”, these guys invest, and they are ready to pour tons of money on startups. The third band is called “retail cohort”, these are the stock guys, the Wall Street boys as we call them. These guys can and will pay for every stock, they want to buy stocks, and this is why many startups increase their value tenfold in months like Affirm. All these bands blame each other for the increase and decrease in businesses’ values. No one knows how anything is worth anything anymore. It is very hard to understand, before the COVID-19 pandemic started, many experts suggested that numerous apps will lose their value but those apps did not lose value, which just proves that no one really knows what is worth what anymore.
What is increasing, what is decreasing, in value and this is becoming the next biggest mystery of the Universe. Regardless, businesses will continue to increase in value depending upon the service they offer, situations they are in, investors being available etc. This is just how it is. How it is going to be.