The Dark Side of Valuation: Valuing Young, Distressed, and Complex Businesses

Valuing money-making companies that have long histories and established business models is straightforward. It is when you encounter difficult-to-value companies that you feel the urge to go over to the dark side of valuation--where you abandon first principles and create new metrics. Aswath Damodaran looks at a range of these companies, from start-ups in new businesses to distressed companies, from banks facing regulatory turmoil to commodity firms, and from emerging market upstarts to multinationals that spread across geographies and businesses. With each grouping, he helps you examine the call of the dark side and its practices and frameworks to value these firms.

To answer these questions, Aswath looks at companies across the life cycle and in different markets, from Uber and Shake Shack at one end of the spectrum to Vale, Royal Dutch, and United Technologies at the other end.

In the process, you learn how to

• Deal with "abnormally low" and negative risk-free rates in valuation
• Adapt to dynamic and changing risk premiums
• Value young companies that are disrupting existing businesses
• Analyze commodity and cyclical companies across cycles
• Value a company as the sum of its parts or as an aggregation of its users/subscribers and customers
• Determine the difference between pricing and valuation, and why some investments can only be priced

1. 1 The Dark Side of Valuation Enlightenment: The Tools
2. Intrinsic Valuation
3. Probabilistic Valuation: Scenario Analysis, Decision Trees & Simulations
4. Relative Valuation
5. Option Valuation
6. The Dark Side of Macro Inputs
7. A Shaky Base: A Risky Risk free Rate
8. Risky Ventures: Assessing the Price of Risk
9. Macro Matters: The Real Economy
10. The Dark Side across the Life Cycle
11. Baby Steps - Valuing start-ups
12. Off to School - Valuing young companies
13. Shooting Stars - Valuing growth companies
14. Not so staid - Valuing mature companies
15. The inevitable end - Valuing companies in distress and decline
16. The Dark Side across company types
17. Ups and Down: Valuing Cyclical and Commodity companies
18. Mark to Market: Valuing Financial Service companies
19. Invisible Investments: Valuing firms with intangible assets
20. Volatility Rules: Valuing Emerging Market companies
21. The Octopus: Valuing Multi-business, global companies
22. Puzzle Palace: Valuing the Unusual
23. The Finale
24. Lighting the Way: Vanquishing the Dark Side