Not all values are knowledge.
His basis is that all values, like all knowledge, is the result of processing of facts by the mind. There are no intrinsic values because _man's mind_ has to be involved in processing the facts, and that there are no subjective values because man's mind has to be involved in processing _the facts_. All knowledge, and all values, are the joint product of both reality and consciousness. The question is how that product is formed. A man therefore has two basic choices: take control by reason in the forefront of your mind or allow your psychology to take over in defiance of reason. The result is the division of values (as considered by a conceptual-level consciousness) into the objective and the irrational. (And, at a subsidiary level, he notes that optional values are those in which man has a choice as to the particular form that values may take within the category of objective value).
By using the phrase "true subjective value" he is literally committing the No True Scotsman fallacy by redefining subjective so as to exclude emotionalism as an example of subjectivism. I continue to maintain that the redefinition itself is an equivocation between two legitimate senses of the word.
His concept of the subjective is the idea of the content of mind being an exclusive primary. To be a true subjective value, a value placed on something has to be completely divorced from the nature of that something. He gives the analogy of the value-meter: one walks down the aisle of a supermarket, then suddenly the needle on the meter shoots up because one passes say a box of cornflakes, and purely as a result of that one grabs the box and puts it in one's trolley. There is no consideration whatever of why cornflakes might be valuable, there is only the value-meter. His argument against subjective values is that in reality one's mind is always going to consider the nature of the cornflakes (or whatever) themselves and a standard of value when evaluating them. The values do not spring causelessly to mind, "there are no baseless, causeless, arbitrary convulsions of consciousness." The abdication in favour of emotion is as close to subjectivism as one can get, such that the values might as well spring causelessly to mind because this method does not allow a man to understand the causes. Nevertheless, it is still not subjectivism because it always remains an identification of facts and their judgement against a standard of value. By saying that no emotion is causeless he is noting that there are always reasons as to why a man will experience a particular emotion, and that any given emotion is the result of subconscious processing of the facts. That is straight out of Objectivism, and he even quotes Galt's speech on the matter.
I am going to speculatively define the fallacy of "defining away the opposition". This occurs when a definition of a word is taken to exclude the undesirable elements from the field of debate. Example: Non-representative art is not merely bad art, but not art at all. Or: Kantian ethics is not merely bad ethics, but not ethics at all. Or ultimately: Kant is not merely a bad philosopher, but not a philosopher at all. This is a fallacy because a definition is an attempt to identify the referents of a concept but is never equal to the referents.
There are a variety of definitions because definition is contextual. The most inclusive definition delimiting a concept will not be the same as the definition of what is proper within the concept because a standard of what is proper is hierarchically later than the concept itself. A proper definition of man is "the rational animal", but infants are not thereby inhuman due to their inability to be rational.
This attempt to deny subjective values exist is "defining away the opposition". If there are proper values and improper values, it is "defining away" to deny improper values are values at all. Regarding the value-meter example, when a person buys the box of cornflakes and then takes it home and eats it it is because of his actions that the cornflakes are ennobled into value status, not the value meter. Men's actions are caused by their minds, in this case it is an unjustified reliance on the value-meter as indicating true values motivating the subsequent actions. It is not obvious the the value-meter is wrong (corn flakes are not poison), some abstract understanding of proper epistemological method is required for that. It is true that 'invalid knowledge' is a contradiction in terms. It might seem plausible to say that considering value as a type of knowledge, an 'invalid value' is a contradiction in terms also. But in epistemology there is a more general classification of mental phenomena than knowledge: ideas. A false idea is not thereby not a idea for being false. And values remain ideas even when they are not knowledge. An idea still is a content of consciousness and can be focused upon to motivate action, and the element of action is the essence of value. By every other feature than the abstract epistemological standard, the man's action is one of valuing. It is non-objective valuing, arbitrary in the sense of unjustified and so appropriately described as subjective valuing.