Stripe investor T Rowe Price has become the latest to cut its valuation on the Irish-owned tech giant’s shares, writing the stock down 64 percent from the price it was valued at at the end of 2021.
Bunnies had risen in value at the end of 2021, making the latest drop particularly sharp, but the new price is around 40 per cent below the value of an Irish taxpayer-backed fundraiser in March 2021 which saw Stripe at 95bn companies then the most valuable private company in the world Silicon Valley.
The latest drop suggests Irish taxpayers’ share of the global payments could be in the region of $24 million, compared with the $50 million that the National Treasury Management Agency (NTMA) put into that deal invested in March 2021 — although paper valuations of private companies like Stripe are illiquid, making valuation a matter of judgment unless a loss or gain is crystallized by an actual sale.
US money manager T Rowe Price announced the new price in a regulatory filing, valuing the shares at $23.04 a year as of June 30. Fundraising in March 2021 was approximately $42 per share.
Investors in this round of funding included funds associated with Allianz, Axa, Baillie Gifford, Fidelity, Sequoia and Irish state money manager National Treasury Management Agency (NTMA).
Earlier this year, Fidelity cut Stripe’s stock valuation to $32.05 each. In July, the company itself lowered its so-called internal valuation to $29 per share by using a third-party valuation for employee stock allocations under US tax and employment rules.
The NTMA, which holds its stake in Stripe through Ireland Strategic Investment Fund (Isif), had not changed its rating when it published an update to its investment portfolio last December, meaning it could not ‘book’ a paper gain when the Share price skyrocketed in late 2021 and has yet to correct it down.
A revised NTMA rating is scheduled to be included in an overall portfolio update in December this year.
The depreciation in Stripe’s valuation isn’t uncommon — the trend has been most evident among its peers in the quoted prices of listed companies like Adyen, a Dutch digital payment processor, but also in cases like Sweden. Buy it now, pay later lending platform Klarna, which dropped $39 billion in valuation to $6.7 billion as it went through a new round of funding with a reduced rating.
On a daily basis, a drop in a company’s valuation doesn’t affect its ability to trade, but it does imply a higher cost of capital, which can be significant for cash-hungry companies looking to scale quickly. and may significantly limit its ability to make acquisitions funded by its shares.
https://www.independent.ie/business/stripe-investor-slashes-its-valuation-on-shares-of-collison-brothers-tech-firm-by-64pc-41932781.html The Stripe investor cuts its valuation of shares in the Collison brothers’ technology company by 64 percent