Common stock is generally given a lower valuation than preferred, but this will nevertheless cause that number to increase dramatically (probably 10x what it was a few months ago).
Sounds like: stock price is high so use its value to its full extent while the price is high and more valuable. Allows selling/granting of fewer shares of stock too.
It gives you an idea of how much upside there is. If the stock is at $1/share, that tells you nothing. But is the valuation is $100 million and you think it could go over $1 billion, that means your funny money could maybe 10x. If you think it’s a billion dollar company and the valuation of $2 billion, maybe your shares are inherently worthless.
does the extremely high valuation give them capital
Only if they sell more shares. Once the shares have been initially sold, the share price can increase ten-fold but the company won't get any of that money. That's the simple, general answer to your question, anyway.
Yes, but at the end you'll still have more real value in that stock then you had at the start, assuming your stock at least performs equal with the market.
Now think about how that "market price" of a share is determined. Surely investors will be valuing a company with $100B in cash higher than a company with $0 in cash.
Of course it can -- the company's real value could easily close that gap in three years. Also, equity pricing is as much about psychology as it is about real value. A stock's value is equal to what people are willing to pay for it.
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