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Finance: What is mark to market? 2 Views
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Description:
What is mark to market? Is it when Mark Zuckerberg writes the stock market a letter, thanking it for being a friend?
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Accounting
- Terms and Concepts / Company Valuation
- Terms and Concepts / Ethics/Morals
- Terms and Concepts / Insurance
- Terms and Concepts / Regulations
- Terms and Concepts / Stocks
Transcript
- 00:00
Finance a la shmoop what is mark-to-market?
- 00:06
alright well Google was private for a long time before it went public public [Google timeline appears]
- 00:12
mutual funds bought the shares of the company when it was private, the company
- 00:16
did a few later stage B C and D rounds before going public in 2004 and each
- 00:22
iteration those subsequent rounds valued the company more highly so a mutual fund
Full Transcript
- 00:27
invested say 20 million dollars in the B round they would have seen the C round
- 00:32
done at maybe double the valuation and while that mutual fund would then
- 00:36
mark to market or mark up their twenty million dollar investment to now be
- 00:42
worth forty million dollars even though the stock of goog was not yet publicly
- 00:46
traded and then it came along the D round which was done at triple the [D round investment appears]
- 00:50
valuation of the C round so then those shares of goog would have to be again
- 00:56
marked up or marked to the new current market valuation which was three times
- 01:01
the previous rounds valuation of 40 million aka a hundred twenty million
- 01:06
bucks today eventually the company did go public and there was no longer need [Google stock price rises on graph]
- 01:11
to mark its value to the market because well the market valued it basically
- 01:16
every second of the trading day if you want to learn more about all this stuff
- 01:19
well then you can just you know google it
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