BVWire—UK hopes all of our readers are silently enjoying the GameStop and AMC stock price explosion these last two weeks. It’s an object lesson most business valuation experts take for granted—that a listed company’s stock price is not necessarily a reliable proxy for the business value of closely held enterprises. HMRC and many contested valuations aside, the guideline public company method always requires adjustments and discounts.

Most of the attention in the financial press has been on the ‘manipulation’ of markets caused by a group of Reddit and other website fans. The schadenfreude, if any, has been in watching the loud voices of victimised protest from the wealthiest global hedge funds as they claim that ‘short squeezing’ ignores and destroys market fundamentals. How are we supposed to conduct our wise investment valuation activities if these small market outsiders are allowed to set the price, they complain.

Boo-hoo. Lesson learned, again. Listed company pricing is always, to some degree, manipulated by the flow of large blocks of capital. Leveraged short selling is one of the ultimate tools of market price manipulation, so the complaints of a few hedge fund managers suddenly caught short feel hypocritical.

And, for business valuers, this is nothing new. GameStop wasn’t a valid comparable for private-business value when its market price was artificially depressed. And it’s certainly not a valid proxy now as regulators and Robinhood rush to protect hedge fund managers with leveraged short positions who are already showing -30% returns in this young year.