It’s All Made Up
Mashable Sold at Fire-Sale Price of $50 Million to Ziff Davis:
Digital-media firm Mashable has clinched a sale for the company — and it’s not for a price that founder Pete Cashmore or investors including Turner were looking for.
Ziff Davis, a tech, gaming and healthcare publisher, is buying the New York-based company for about $50 million, the Wall Street Journal reported, citing anonymous sources. That’s 20% of Mashable’s valuation of $250 million following a $15 million round of funding last year led by Time Warner’s Turner.
People need to remember “valuation” is a euphemism for “made up number”. Companies, like money, have no inherent value. They only have value because we all agree they have value.
Unlike dollars and cents though, company valuations are way easier change.
Then there’s the endowment effect hypothesis that states we ascribe more value to the things we own than the things other people own. Mashable’s investors thought it was worth $250 million last year. Ziff Davis didn’t agree.