One guy who wouldn't have paid so much if there weren't other people offering similar amounts. My point is that you can't pick an arbitrary amount ($58 Million) for the valuation - but that this amount is always dependent on other people.
The problem with your example is that we all have limited knowledge about any given business transaction. Assuming ten people were standing around bidding on little rocks thinking they are diamonds, for that moment (to those people) they are worth $10k. When they have more knowledge (i.e. that this is glass and not diamonds) then the worth of those rocks drops. So the worth varies based on the knowledge in the market and valuations of others.
Now in any given market if one has more knowledge about a good or service one might be able to say that a good or service is over valued. For instance, I have always believed Myspace to be over valued. However, this realization does not give one the ability to pick a number out of the air and state that it is a correct valuation.
The problem with your example is that we all have limited knowledge about any given business transaction. Assuming ten people were standing around bidding on little rocks thinking they are diamonds, for that moment (to those people) they are worth $10k. When they have more knowledge (i.e. that this is glass and not diamonds) then the worth of those rocks drops. So the worth varies based on the knowledge in the market and valuations of others.
Now in any given market if one has more knowledge about a good or service one might be able to say that a good or service is over valued. For instance, I have always believed Myspace to be over valued. However, this realization does not give one the ability to pick a number out of the air and state that it is a correct valuation.