With an increasing number of countries worldwide using their powers to prevent the sale or merger of companies, will we see a devaluation of these companies? After all, owning something is only of value if you can sell it, and if you can only sell with permission from 10+ country governments, all of whom can say no for strategic reasons, then it isn't such a great purchase.
Owning a company is traditionally thought to be of value because you get a stream of dividend income from the profits the company earns, not because you can sell the company.
what? no. assets/IP have always been highly valued and certainly not on the sole basis of their cost-to-replicate.
(and if you can't sell assets, that's the only valid metric for valuation - "I need that thing and would have built it anyway". Even if it's complimentary to your existing business - the BATNA is "build it myself".)
extremely controversial (if not outright incorrect) statement to be labeling as "traditional wisdom". Says who?Probably not any economics textbook written in the last century.
You are confused or may not have been paying attention to the context of the post you replied to. We're talking about the value of a publicly traded company, Nvidia. We aren't talking about the value of the Mona Lisa, or an NFT of a dancing monkey or even a Bitcoin.
I didn't write anything controversial and you don't need to consult an economics textbook, a basic Investopedia article will do:
"The dividend discount model (DDM) is one of the most basic of the absolute valuation models. The dividend discount model calculates the "true" value of a firm based on the dividends the company pays its shareholders."
An alternative model if there is no dividends:
"the Discounted Cash Flow model uses a firm's discounted future cash flows to value the business. "
The ability of a firm to sell itself to a foreign firm is not a factor is valuing the firm.
I wouldn't use these models to value a Pikachu trading card, but this is stock market 101 type stuff.
Good point from a global view. I'd like to see a little more international cooperation, leading towards a global standard, but we have many hurdles between here and there, especially involving trust between nations.
