How many startups are trophy assets?


Journalists have been marveling over the recent valuation of the Economist after Pearson PLC sold half its stake for $738 million. Could the Economist really be worth $1.5 billion, which is more than the Financial Times ($1.3B), and 6 times Washington Post ($250M)?

Pearson called The Economist and FT trophy assets. Trophy assets are expensive ego-driven toys, like buying sports cars or sports teams.

BuzzFeed is another publication that has a $1.5 billion valuation, according to last week’s $200M investment.

There is an important distinction, however. The Economist and FT have both online and print circulations, and BuzzFeed serves up horse vomit.

I wouldn’t call BuzzFeed a trophy asset though. No brand loyalty. Subscribers to The Economist regularly return for the latest information. People aren’t going to load up to find the latest clickbait.

BuzzFeed is more like a bet on a sustained tech bubble.


There is a hedge fund in SF that invests in the public-company counterparts to hot private startups. For example, HomeAway ($AWAY) with a $2.8B market cap instead of Airbnb at $24B. Or Pandora ($P) at $3.8B instead of Spotify at $8.5B.

Let’s say I’m a rich person looking to allocate some assets. What sounds more attractive?

Hedge fund A: We can buy you some shares of BOX, which is trading at a discount to its private company peers.

Hedge fund B: We can get you some super hot pre-IPO shares in Dropbox.

When enough people choose Hedge fund B, a trophy asset is born.

See Also:
Storied Asset Sales: Valuing and Pricing “Trophy” Assets –Aswath Damodaran

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