Part 5/11:
The Risks and Challenges of Sky-High Valuations
One of the core issues with these valuations centers on the disconnect between hype and fundamental valuation metrics. When a company is worth $500 billion before an IPO, questions arise about what happens if it needs to grow even further—say, to a trillion-dollar valuation. The problem is compounded when these valuations are primarily based on projected growth and strategic value rather than concrete earnings or profits.