A B C D E-F G H I-J K-L M-N O P Q R S T U V-Z

V-Z
Valuation
Determination of the value of a company’s stock based upon eanings and the market value of its assets. A valuation report provides this information to help market players make informed stock purchase decisions.

Valuation Multiple
An approach to valuing companies that relies on comparing a company’s stock price to its income from operations, cash flow from operations, or earnings per share. The higher the multiple, the more richly valued the company is. Underwriters use valuation multiples of an IPO’s peers, or comparables, to determine the appropriate level at which the IPO should be priced.

Vapor Ware
Derogatory term for IPO issuers peddling products that are not yet commercialized, or lack significant demand from potential customers. Often used when the investment community harbors suspicions that an issuer’s growth targets are not supported by past sales uptake. Also a generic expression for companies with wildly optimistic hopes for speculative business models.

Venture Capital
Venture Capital firms invest in private companies that need capital to develop and market their products. In return for this investment, the venture capitalists exact a price - significant ownership of the company and seats on the board of directors. For the most part, venture capitalists focus on companies in the technology, medical and retail sectors. Venture capitalists raise money from institutional investors, state pension funds and high-net worth individuals, usually in the form of partnerships. Investors should look at the venture capital firms track record and expertise when evaluating an IPO.

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