How do you know the price if it's public? Is that their buyback price/ the price you can buy it?

The short answer is like a public company

What matters is performance compared to expectations. Stock prices typically move prior to announcements to be in line with expectations. Exceed expectations, price goes up. Miss expectations, price goes down.

My naive view.

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"Go yell at an M&M"

Arbitrarily

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Remember - It's important to be comfortable in your own skin... because it turns out society frowns on wearing other people's

Right but this is a private company which should make it more pure math than public

Right, my understanding is that there are a bunch of different formulas for valuation. But I couldn't name them, or know anything about them.

I would think that if a private company was granting you stock options (or selling you stock) then they would explain how the stock was valued. Seems like everyone would have the exact same question.

They will typically either use public market comparables, or use some kind of adjustment factor that adjusts for current public market or economic conditions. Not sure what industry you're in, but take a look at a few of your closest public comps and check their P/E this quarter vs. last quarter.

What you're seeing is not unusual. I get that it is frustrating - one of the supposed benefits of working for a private company is to avoid quarter-to-quarter fluctuations.

Lastly, you should feel free to ask your manager or someone to see the valuation methodology. Even though you're not a public filer, there should be a described formula or process in the bylaws or somewhere.

Also true. Basically I'd see what management is doing if they're buying then buy because they fudged lower to catch a pop by end of year or they want to buy out the founders family or forward looking growth is bad and it's a legitimate mark down

I believe that the IRS has fairly specific methods for determining the share price of stock in a privately held firm: http://www.mbbp.com/...mmon-stock-valuation

In your company's case, it might well be that they sold stock to investors to raise capital, thus diluting the value of the common shares.

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Taco cat spelled backwards is....taco cat.

not sure...how any of this shit works really. Our latest debt to capital ratio is listed below 1%

In years past they favored leasing vs buying, that trend seems to have changed over the last few years. We have been acquiring tons of real estate and buying up shopping centers left and right.

I don't know how private companies value stock, but haven't you said before that you work for a grocery chain? Could the Amazon purchase of Whole Foods be playing a role. I know it's driven down the stock price of most of the publically owned Grocery store chains.

Yeah, Pretty sure that had a hand in it. Rough waters ahead for most retailers.

There are many variables that go into valuations. Maybe the last valuation was based on a 5% income increase and since it was only 3.5 you lose gains from the last uptick as well as a decrease for the next quarter.

Maybe a job that they were counting on didn't come through.

Maybe the boss wants to buy more stock so he wants to pay less.

Maybe more people are selling their stock than buying and the company can't afford all that cash going out the door.

Same thing happens to publicly traded companies. Except with them it comes down to what someone is willing to pay for the stock.

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"I think I've cracked the code. double letters are cheaters except for perfect squares (a, d, i, p and y). So Leddy isn't a cheater... "

The Senior Partners go on Retreat and decide what it needs to be that year.

The only reliable valuations for private companies are from ESOP Company's whose valuations are from independent 3rd party valuation consultants reviewed by an independent ESOP Trustee. This still won't stop the DOL from crawling up your ass with audit after audit, though! Do I sound bitter, lol?!?!?!?

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Lifeguard: "Do you need help?" Me: "No, that's just my butterfly."

Isn't there potential for someone over valuing goodwill and skewing the share price?

Hmmm... so your company was acquired and is still valueing the stock in the same way as before? It sounds like you are getting the shaft if your private stock valuation is tied to the other stocks in your sector. Aren't those stocks suffering precisely BECAUSE of the merger your company just made?

I do not work for WF, another company

Just because net earnings goes up doesn't really look at the liabilities side. Do you have a pension? Pension obligations is where all companies and governments, F with numbers until it can't anymore. Take a look at pension obligations if your company has one. I bet you if they do, the pension is not as well funded as they would like you to think... The reality is no one's is.

Also I work for a private company that issues stock to me. It's complete BS the valuation they come up. The value of a company is what at the end of the day is what someone will buy you for whether it is your own company i.e. buying your shares back when you quit, or retire, or another company acquiring your company. You have no liquidity until you can sell. So...really it's pie in the sky valuations.

Disclosure, Finance degree here....

I have not read all responses, so I dont know if someone mentioned this or not.

Stock price is essentially = total value of company / number of shares of stock outstanding

Or... total value of company = stock price x number of shares of stock outstanding


You have not stated how many shares of stock were outstanding in 2016 and 2017. That may help understand why the price of stock went down. Further, while sales and profits are about 3.5%, notice that the earnings per share was a bigger change than 3.5%. Thus, I think something is up with the outstanding shares from one year to the next.