#ZOMATO share price today dropped to historic low of Rs. 41. With this said, World renowned Valuation Guru Mr. Ashwath Damodaran's prediction turned out to be true. During its listing around a year back, Mr. Damodaran valued Zomato at no more than a meagre fair price of just Rs. 41. Today the market price of Zomato coincided with Mr. Damodaran's intrinsic value of the company. And after all this where the actual bottom of this share will be formed. Nobody can tell exactly. Initially Zomato's IPO was brought at very high Valuation and company got listed at more than 50% premium. Even after that Zomato hit the all time high of Rs. 169. Media, analysts, celebrities everybody vouched for this company with their fairy tale growth story of a loss making entity. Both experienced and young Investors fell prey to this beautiful narrative. But facts are facts. No matter how overvalued any entity is, Market always delivers justice to every company and shows its true value. Be it a undervalued company or an overvalued company. Now for past several months Zomato has been only a Falling Knife and its Market value continues to only shrink with each passing day. Meanwhile Investors have lost humongous wealth. Zomato share's story teaches us an extremely important lesson that never fall into any narrative. Apply your brain, do a thorough research, understand valuation concept or seek assistance from a professional financial expert. Because the cost of an investment in any overvalued or loss making entity is always heavy for an investor and it is enough to shake his or her confidence.
Perhaps after this event, Zomato may revive or bounce back but one should also wonder would that be a temporary speculative relief rally or will that sustain on any fundamental shift and if that shift exists then investors should always strive to figure it out and make their investment related decisions rationally.