WitW #021:
What’s in a horn?

🦄🕵️🐴 If you look closely, can you see something a little strange about all these unicorns?

When I’m not busy with very serious research like this week’s intro, I’m often working on valuation topics like this. What makes a unicorn a unicorn?

You can watch the video to get my perspective. FYI – because I shot in the middle of a whiteout, it’s probably more of a “cold take” than a “hot take.” Though arguably, I’m always full of hot air, so it probably still qualifies.

Anyway, the gist of it is that there are many ways that companies get “marks” or “prices.” Some of these are very real – like when someone buys 100% of a company with cash and there is no probability of anti-trust or national security complication. Other marks are…well, internal 409As based on dated market comps for companies with no free cash flow and unsustainable financing terms.

My biggest fear is that we are creating feedback loops, where the attainment of labels is becoming a purpose in itself. No one – owners or investors – will benefit from short-sighted goals like these.

I’ll just stick with my old strawberry roan.