Investing Related Guides
Behavioral Finance
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A concept company is a firm that attracts a high valuation based on excitement for its business model as opposed to fundamentals such as revenue, net profits, growth and book value. Concept companies may go through a dramatic boom and bust cycle. The following are common types of concept company.
TechnologyConcept companies are often the leader in a technology that is widely covered by the media with wild predictions for its future potential. Charismatic LeadersFirms led by executives who say exciting things and aggressively take on risk. For example, they might make big acquisitions and often seek to raise more capital.IndustryFirms in a young industry or that have a new type of business model.
Local ChampionsConcept companies that benefit from a home bias whereby locals see the firms valuation as reasonable but people in other countries view it as dramatically overvalued.
Behavioral Finance
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