Most simply, value is a non-fixed inherent property that can change depending on the asset / liability and the entities involved. A valuation is an actual estimated value given some conditions.
Simple example: Celery has no value to me, because I find its taste disgusting. However, I happily pay for bundles of cilantro, which in turn have no value to others that find its taste disgusting.
In the case of a publicly traded company, the conditions are "if all shares were immediately liquidated at the current price". In the case of a company buying that publicly traded company, an actual value can be arrived at, due to having a fixed set of assets, liabilities, and participating entities. And, as you pointed out, those two numbers rarely match up.
Comments
It's not the company's actual value, but rather the company's actual valuation. Related, but very different, concepts.
I'm not sure they're very different, if at all. I guess a public valuation is a bit under what you'd actually need to pay to acquire it outright.
Most simply, value is a non-fixed inherent property that can change depending on the asset / liability and the entities involved. A valuation is an actual estimated value given some conditions.
Simple example: Celery has no value to me, because I find its taste disgusting. However, I happily pay for bundles of cilantro, which in turn have no value to others that find its taste disgusting.
In the case of a publicly traded company, the conditions are "if all shares were immediately liquidated at the current price". In the case of a company buying that publicly traded company, an actual value can be arrived at, due to having a fixed set of assets, liabilities, and participating entities. And, as you pointed out, those two numbers rarely match up.
Well, I don't think it's entirely uncommon for a complete set to command a premium.