Consequently, the initial public offering price has been determined arbitrarily by the Company. This valuation has been arbitrarily set by the Company.
Valuation refers to the price to buy the entire company.
We spend a lot of time referring to valuation disclosures because they are important to both the investor and to the company. This section provides an overview on valuation disclosures. This caveat serves two purposes. It also helps protect the company and underwriter from later charges that the IPO price was set too high. After all, it boils down to a statement that the stock price may be quite different once it has been in the market.