As a CityGuru Investor this is perhaps the most important question you can ask; and one you should be asking frequently.
Most CityGuru Investors have exchanged their savings for equity, or shares in the company. Since CityGuru, Inc. has no accounting system or even basic bookkeeping necessary to provide financial reporting for individual investment accounts the only measure of how your money is performing as an investment is in knowing the share price of the stock you own in the CityGuru, Inc.
Yet, nothing has been more misunderstood—and mis-quoted—than has the price of a share of CityGuru, Inc!
For example, any share price quote you may have heard probably was based upon a vague explanation of the correlation between the amount of funding that has been raised (or will be raised) and the number of outstanding shares (according to CityGuru, Inc. corporate registration is 10,000,000). If so, do not use this as a reason to increase the funding of your CityGuru, Inc. investment. The surest way to determine a valid price for a share of CityGuru, Inc. stock is to simply apply the same basics as do public companies trading their stock on the Open Market, or stock exchanges.
Yes, it is true that CityGuru, Inc. is a “private” company, and as such, is not subject to the same regulations or methods of determining share price as are “public” companies who are governed with strict Security Exchange Commission (SEC) regulations. And yes, CityGuru, Inc. can quote whatever price they want for their shares.
But, you are contemplating or you already have traded shares in CityGuru, Inc. It is necessary to know what a share is worth.
Owning stock in a company means you own a piece—or share–of that company. How much you are willing to pay for that share depends upon the value of the company. This is vitally important to you as an investor because when the time comes that another investor wants to buy your share–the price he or she is willing to pay for it will depend upon…the value of the company; your company, CityGuru, Inc.
So, what is the value of CityGuru, Inc.? No one knows. The company has no accounting system by which to determine value; no numbers substantiated by Income Statements, Profit/Loss Statements, Balance Sheets, or even Shareholder Equity. Even incoming funding is not accounted for. Without any means to substantiate and measure the business and management track record, CityGuru, Inc. cannot demonstrate its business value.
As CityGuru Investors let’s suppose we all can agree upon a share price Who will buy it from us at that price? As a private company, we don’t have the option of selling our shares to a ready-made market as do public companies. Even if we did, savvy investors are going to pay us only what they think the shares are worth (value) despite the bright visions of our Founder. Should you find another investor willing to buy your CityGuru, Inc. shares you are likely to have to compete with your own CityGuru, Inc. management who would surely want that cash as new funding rather distributing it as an investor buy-out.
As Founder, Drew Morrison, is quick to point out about the Future–there are always possibilities of “going IPO” or a merger/acquisition by another more powerful company, etc. But that is pure supposition and be may many more years before it is possible. That will still depend upon CityGuru, Inc. being able to validate its value to the Open Marketplace with a sound financial track record that is only possible if CityGuru, Inc. establishes any capability for auditable financial reporting.
So, how much is a share of our CityGuru, Inc. stock worth? Really worth? With no objective evidence of value or even a market of potential buyers, we cannot substantiate a share price more than $0.00 per share.
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