How to answer this interview question?
If a company just IPOed, there's no past financial data on this company, and this company has no peers, how would you value this company?
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The prospectus got tons of data I believe... Then DCF some shit out of it.
So use the prospectus and make some growth assumptions to build DCF model?
No such thing as a company with no peers... you spread comps on multiple tiers of companies that do something similar (ie: end markets, size, products, sector, geography, etc)
If you have someone cynical or experienced, just look at them for a second. Then lick your index finger and raise that hand in the air (as one does when trying to figure out the direction of the wind), and smile... (only half tongue in cheek)
I have definitely had guys running VC funds (some pretty good shops) give me this as an answer when I've asked them how they've valued x or y company. Assumptions are assumptions - no one knows the future, if they did, they probably wouldn't be working right now...
Or.. in addition to the above responses, you could look at companies in a similar or same broad sector/area and how they have IPOe'd and use that as comps (you might have to go across countries). Probably no real right or wrong answer as long as you can justify it and sound smart.
Good Luck
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