The Ipreo Blog has an ongoing mission to feature insight and analysis from across Ipreo’s different business units. In the past we’ve discussed the pathway to a career in investor relations, the state of the new issue market for investment-grade fixed income, and the impact the upcoming presidential election may have.
Today, we turn to one of our experts within the private capital markets space for a discussion of volatility.
Cody Rosson, (CVA), a Senior Valuation Analyst with Ipreo Private Capital Markets who specializes in business and securities valuation engagements for corporate finance, financial reporting and tax purposes, takes to the blog today to explore the impact volatility can have on the value of a private company.
While we are valuing a private company, we must realize that we cannot retrieve private data in order to calculate volatility. Even if we could, private stock prices are not actively trading and there is not much information that could be used in calculating an accurate volatility measure. We must look at historical volatility from the public markets. There are various sources for obtaining public market data. The primary goal is to represent the industry sector, or sample of the sector, in which your company operates and calculate the volatility on each company. You may then analyze the results and apply them to your subject company accordingly.
Read the full Special Report – Introduction to Volatility