Bad Unicorn?

Last week we discussed the headlines caused by Fidelity Funds marking their investments to market and resulting in large paper losses for their investments in Snapchat and other unicorns. A few points to note on this: 

1. For most of Fidelity's investments they are still very much in the blue (i.e. have made money on their investment)
2. Fidelity funds are required to mark their securities to market each month, but the data is only available to the general public a month later... this means that the values we were seeing in recent weeks were actually the values through the end of September, when global markets were taking a bath... valuations have subsequently been marked up as global equities have recovered. 
3. For the skeptics out there, these mark ups are not a knee jerk reaction to the headlines that were caused following the initial markdowns. (Many feared that this would signal the end of mutual funds participating in late stage rounds because entrepreneurs wouldn't want their valuations publicly disclosed and subject to markdowns such as the ones in late September.) The valuations are established by an independent team at Fidelity and not subject to the inputs of the fund managers themselves. 

One positive development from all of this is that late stage unicorns are slowly being subject to more public pricing scrutiny as they move closer to the public markets. This is a good thing, and will allow investors to distinguish between "good and bad" unicorns. The bad unicorns will find their days of free spending and poor business management are numbered, and will need to improve in order to survive. This, in turn, will be good for consumers. 

You can read more here - http://fortune.com/tag/term-sheet/