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The only reason revenue, users, scale, investor love, patents, staff, infrastructure, etc. matter is that they usually are indicators of potential for profit. P
by imagist 10y ago
The only reason revenue, users, scale, investor love, patents, staff, infrastructure, etc. matter is that they usually are indicators of potential for profit. Profit is the entire point of investing in a company.
But the greater indicator of potential for profit here is that Twitter has existed for 10 years and has never turned a profit.
Given this, I think that revenue, users, scale, investor love, patents, staff, infrastructure, etc. have all become disconnected from Twitter's actual profit potential. They haven't made a profit, they aren't going to make a profit. I think that the only logical choice is to dismiss the idea that Twitter has value.
But, as I noted, perceived value can be as profitable as real value for an investor. Just don't be naive and mistake the perceived value for real value--naivety will lose you money.
- fredguth 10y agoTwitter has existed for 10 years, as you say. How many 10 year old companies have 300mm users and revenue at $2.2 billion and growing at this pace?
- imagist 10y agoThis is the wrong question to ask if you're investing, and I've already explained in the parent comment why this is the wrong question to be asking. Usually these things are indicators of profit potential, but they aren't in Twitter's case.
- vit05 10y agoI think Salesforce have never had profit. Neither Youtube for Google. The problem with twitter is that people do not believe they could make big money alone and for a long time without be destroyed for someone else in a garage. They still see a company that needs a cash cow that could financial the cost of innovation.
- cstejerean 10y agoThere is no way Twitter couldn't turn a profit on $2B in revenue. But that's not their focus at the moment. Instead they really want to grow the revenue numbers even higher, worrying about the profit later. However they may not be able to increase revenue much higher, and investors aren't really interested in a profitable but stagnant Twitter. But if they wanted a profit they certainly could, starting by right sizing the company rather than pouring hundreds of millions of dollars into R&D that is barely moving the needle.