Tech Stock Valuation

Means predicted that managers with little direct ownership interest, and thus

having their “own” rather than stockholder interests in mind, would come to run

the bulk of business enterprise by the latter part of the 20th century. Before them,

economists’ concern with the “other people’s money” problem dates from 1776

and Adam Smith, who noted that people tend to look after their own affairs with

more care than they use in looking after the affairs of others.

Agency problems exist because of conflicts between the incentives and

rewards that face owners and managers. Such conflicts commonly arise given

owner-manager differences in

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Risk exposure

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Investment ...