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Some analysts blame unrealistic valuation while others cite excessive spending.
Another City source said that the sale prompted unrealistic valuation expectations in the market, which would deter potential buyers.
The unrealistic valuation of assets is a common occurrence in Korea these days, says Stephen Marvin, head of research at Jardine Fleming in Seoul.
On the other hand, the plethora of dollars available in the seed ecosystem has created a lot of noise, and some unrealistic valuation expectations.
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Unrealistic valuations will make serious investors roll their eyes.
This is due in part to unrealistic valuations of their asset base during the stock market bubble, which left them with an enormous hole when the bubble collapsed.
But they will be followed by less robust outfits the Facebook and LinkedIn wannabes with prices that have been dangerously inflated by the angels' antics.The froth in China's web industry could also lead to unrealistic valuations elsewhere.
Rather than trying to maximize the value of their I.P.O.'s, start-ups should align themselves with capital partners who are builders themselves, interested in sustainable growth and wary of unrealistic valuations.
Potential litigants may include secondary-market buyers of limited partners' stakes, as well as limited partners like pension funds that may plan payments to pensioners based on unrealistic valuations.
His note listed, among other things, a balance sheet that listed assets $5bn above reality, a lack of expertise and adequate systems in accounting, unrealistic valuations of inventories and billions of dollars in potentially toxic liabilities.
The Wall Street Journal reported on July 30 that the "state-owned China Securities Finance Corporation has been spending up to 180 billion yuan a day ($29 billion) to try to stabilize stocks". Since the Shanghai exchange has fallen sharply since then, the amount of money China burned trying to prop up already unrealistic valuations must be staggering.
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