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

Author

Listed:
  • 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)

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.

Suggested Citation

  • Fiesenig Bruno & Bock Carolin & Khoroshylova Anna & Schiereck Dirk, 2025. "Assessing the Fair Value of Unicorns Post-IPO: An Analysis of Applied Valuation Methods," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 20(1), pages 29-48.
    • Handle: RePEc:bpj:jbvela:v:20:y:2025:i:1:p:29-48:n:1001
    DOI: 10.1515/jbvela-2024-0018
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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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