Stripe’s board approved the lower internal share price effective June 30

Source: stripe.com

According to Wall Street Journal, the company informed employees via email last week about the internal share price drop. Effective June 30, it was around $29, versus the $40 from its last internal evaluation. The company did not explain its decision.

The valuation measure mentioned in internal communication is determined separately from stock held by major shareholders. Also known as 409A valuation, it is an independent estimate of a startup’s fair market value, often used to price stock options to employees.?

Such a move reduced the implied valuation of Stripe’s shares to $74 billion, whereas the company’s last valuation by private investors was $95 billion. A lofty estimation came up in March 2021 when Stripe raised $600 million from a group of investors that included Ireland’s National Treasury Management Agency and Fidelity Investments. After the fundraiser, it became Silicon Valley’s most valuable private company.

Lower valuation took place amidst an ongoing market selloff. It has hampered private fundraising and led many fintech startups to cut costs and jobs. The shares of publicly-traded fintech companies have plummeted in the past few months, making Stripe look overvalued.?

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