Why Mutual Funds Can’t Agree on What Unicorns Are Worth
ByPicking the right number “is as much an art as it is a science.”
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With hopes of getting in early on the next big initial public offering, managers at some of America’s top mutual fund companies have plowed billions of dollars into Dropbox, Palantir Technologies, Snapchat, Uber Technologies, and other startups still in venture capital mode.
Now, after a year of volatile equity markets and a drop-off in IPO activity, fund companies are pulling back on making private deals. Even so, funds still have to update their estimates of what existing investments are worth. Their disclosures have become one way market watchers track the rising and falling fortunes of Silicon Valley’s “unicorns”—private companies that have touched $1 billion or more in investor valuation. But putting a price on shares that aren’t regularly traded is neither easy nor absolute…
Why Mutual Funds Can’t Agree on What Unicorns Are Worth
