The Dark Side of Valuation: Valuing Old Tech, New Tech, and New Economy Companies - Softcover

Damodaran, Aswath

Softcover

ISBN 10: 013040652X ISBN 13: 9780130406521

Publisher: Financial Times/ Prentice Hall, 2001

Synopsis

It has been a brave new world for investors, since the explosion of dot.coms onto the scene. What is their worth? How do you assess them as an investor? How do you apply traditional investment analysis to valueing them and what new analysis tools do you need? And what about companies that blend the old and new economies? How do you assess them as well? These are the frontiers on Valuation.

About this title

About the Author

Aswath Damodaran is Professor of Finance at the Stern School of Business at New York University, where he teaches corporate finance and equity valuation. Damodaran has written two books on equity valuation (Damodaran on Valuation and Investment Valuation), as well as two books on corporate finance (Corporate Finance: Theory and Practice and Applied Corporate Finance: A User's Manual). He also published widely in leading journals of finance, including The Journal of Financial and Quantitative Analysis, The Journal of Finance, The Journal of Financial Economics, and the Review of Financial Studies.

Damodaran received the Stern School of Business Excellence in Teaching Award in 1988, 1991, 1992, and 1999. In 1194, he was profiled in Business Week as one of the top 12 U.S. business school professors. Damodaran holds M.B.A. and Ph.D. degrees from the University of California at Los Angeles. Prior to joining NYU, he served as visiting lecturer at the University of California, Berkley from 1984 to 1986, where he received the Earl Cheit Outstanding Teaching Award in 1985.

From the Back Cover

• The comprehensive guide to valuing technology companies
• Projections for future revenues, earnings, cash flows, the impact of stock options, and more
• 5 detailed case studies cover the entire tech lifecycle: Amazon.com, Ariba, Cisco, Motorola, and a new IPO
• Presented by one of the world's leading experts in valuation
• State-of-the-art tools for assessing the value of any technology company

Technology companies have exploded in importance, yet investors and analysts face unprecedented challenges in valuing them. In The Dark Side of Valuation, one of the world's leading valuation experts reviews every approach, demonstrating exactly how to adapt traditional techniques to minimize risks and maximize returns.

Aswath Damodaran begins with an overview of the markets' dramatic shift towards technology stocks ― specifically new technology stocks. He then identifies key valuation principles and techniques, demonstrating them through five case studies that encompass the entire technology company lifecycle: Amazon.com, Ariba, Cisco, Motorola, and a new IPO-ready startup. Coverage includes:

• Adaptation of discounted cash flow models for tech companies with limited histories, shifting business mixes, and volatile stock prices
• The limitations of traditional accounting definitions in measuring technology company cash flows
• Superior processes for estimating future revenues, earnings, and cash flows
• Evaluation of the impact of management and employee stock options on share value and earnings multiples
• An in-depth assessment of PEG and price-to sale ratios
• Relative valuation: fundamentals, earnings multiples, and revenue multiples

"What a refreshing book to read! Damodaran's book is essential if capital markets are going to accurately gauge the contributions of emerging companies...His insights are illuminating and his mastery of financial analysis is unmatched."

―Louis Columbus
Director of Marketing, Linksys

Edition details

• Publisher: Financial Times/ Prentice Hall
• Publication date: 2001
• Language: English
• ISBN 10: 013040652X
• ISBN 13: 9780130406521
• Binding: Paperback
• Edition number: 1
• Number of pages: 512