It is, according to him. The world may not believe him, but that's the statement he made. And he stands to lose up to $10 if he lied or misjudged it.

> that's the statement he made

More fundamentally, valuations are a metric on stock price and shares outstanding. The latter, too, is a metric on a company’s charter, outstanding (and anticipated) warrant and option and conversion obligations, et cetera.

The concrete quantum is the trade. Everything else is educated conjecture.

he doesn't have to believe it's worth 10k.

he just has to believe that someone else can be convinced it's worth 11k.

Right, he doesn't have to believe what he stated - "lie" was one of the possibilities I listed. But you can't claim the gesture is meaningless.

Exactly. Take almost any tech startup (Uber for instance, is not worth anywhere near $100B but they've managed to convince investors otherwise)

According to your friend, yes.

According to someone else, probably not.

Companies (as well most all things) are only worth as much as people are willing to pay for it.

When a company like SpaceX raises funds at a particular valuation, you can be sure that they have done a rigorous analysis to figure out what is an acceptable valuation for their target buyers.

That's precisely right. Because that valuation is the price someone was willing to pay, which makes it a better estimate than a "reasonable" number which isn't backed by anyone's actual willingness to invest at that price.

Yes, but good luck convincing the next investor of that.

It’s not that hard if the lemonade stand has been pumping out at least $150/month in profit for the past year or two.

It means your lemonade stand is worth 10k to your friend apparently. How many friends you got?

According to that person, yes. You'd find out if it actually was, if you sold the rest of it.

Regardless, equity is not "leverage", and does not have the same risks.