Illiquidity discount
A reduction in value because the stake cannot be sold quickly at a fair price: no exchange, a narrow set of buyers, restrictions on exit.
How to read the number
Explains why a private company is valued below a listed peer with identical metrics.
When the metric lies
The size of the discount cannot be observed directly and is taken from studies of other markets. Transferring such an estimate to a different market is an assumption, not a fact.
Also known as: discount for lack of marketability