• coffee@lemm.ee
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    1 year ago

    Worthless =/= insolvent.

    The value is determined based on a shareholder valuation, insolvent means having a negative cashflow and depleted reserves.

    You can technically run a stock absolutely into the ground if everyone would place sell orders at market (i.e. without limit) and the only buyers would offer 1 cent.

    That changes nothing about the profitability of the company though.

    And while this is a very hypothetical scenario for a listed company, for an unlisted one you can freely adjust your list price. If he were to sell 1% for $1 to his neighbor, the company valuation would be down to 100 bucks.

    • Buffalox@lemmy.world
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      1 year ago

      Since it’s not a stock company, the valuation is speculative.

      But the company being insolvent, and running on a deficit without prospective og turning a profit. Would by normal measures render the company worthless, except if there is a tax benefit to take over.

      Musk can value it at whatever he wants, I strongly doubt he will find a buyer at any price.