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The impact of ownership structure on the market value of companies in response to COVID-19

Author

Listed:
  • Michal Drabek

    (Department of Business Economics, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic)

  • Daniel Pastorek

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic)

Abstract

The paper focuses on differences in the valuations of privately held companies and publicly traded companies in the EU market as a result of the first year of the COVID-19 pandemic. This exercise is carried out by employing a unique dataset of individually assessed valuations of companies from the brewing industry for 2019 and 2020. The results confirm the existence of a discount in the valuation of private companies and indicate that it increased during the pandemic. The paper also identifies a significant difference between the median multiple and the market capitalization of the whole of the industry sector. This provides more detailed data on the differences with respect to ownership structure, but also information that allows the practical use of multiples in the valuation of privately held companies.

Suggested Citation

  • Michal Drabek & Daniel Pastorek, 2023. "The impact of ownership structure on the market value of companies in response to COVID-19," MENDELU Working Papers in Business and Economics 2023-87, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:87_2023
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    private company valuation; private vs. public; COVID-19; brewery; private company discount; industry multiples;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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