Study On The Cross-Border M&A Valuation Of Internet Enterprise

With the development of Internet technology,domestic companies carried the strategy to merger overseas Internet companies.But in recent years,large mergers and acquisitions still keep high failure rate,as the core part of the transaction,valuation is reasonable and particularly vital.So what is the problem in Internet companies' valuation of cross-border mergers and acquisitions,and whether the existing valuation theory is suitable has become an urgent issue.This paper analyzes the problem of Internet enterprises' cross-border M & A valuation,studies the value composition of Internet enterprises in cross-border M & A,and proposes solutions for cross-border M & A valuation of Internet companies.This paper first analyzes the problems of Internet companies' valuation in M & A,and points out that the traditional valuation methods' applicability is not proper.At the same time,the essential factors in the valuation are not appropriate and not suitable to the unlisted Internet companies,then analyzes the characteristics of Internet companies and value composition,pointing out that the user size,user stickiness,average revenue per user and the ability of enterprise monopoly is the core value of Internet companies.On this basis,the paper proposes a valuation model based on Metcalfe's law.The value of Internet companies is proportional to the square of the number of active users,user duration,average revenue per user and enterprise monopoly ability.Finally,it uses a case to prove the feasibility of the valuation model.