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For companies that aren't going to eat the world, only exist on the network effect, and are happy in their space, a P/E of 5 is reasonable. How much would you p
by debacle 9y ago
For companies that aren't going to eat the world, only exist on the network effect, and are happy in their space, a P/E of 5 is reasonable. How much would you pay to buy craigslist?
- wand3r 9y agoI assume they could effortlessly ramp to $1B if that estimate is semi-close. It would cost virtually nothing to add more paid markets and services; maybe allow the gravity algo to be tweaked. Figure very low costs for a site like that you could make your money back in 5-6 years; which is insane at that scale. I bet if they put it up for sale for $3B it would be sold by the end of the week
- eanzenberg 9y agoAt least 10x their yearly profit? What other investment provides a consistent 10% yearly return on the scale we're talking about? At P/E ratio of 5, you literally just wait 5 years and you've just made as much as your initial investment.
- AnimalMuppet 9y agoIf you get five years before someone disrupts it. That's not a given.
- accountyaccount 9y agoGiven craigslist has been around for 20 years I think it's fair to assume they could take an upwards of 5 years to unseat. Even Myspace continues on to this day.
- ouid 9y agoA p/e of 5 is NOT reasonable. Has everyone gone mad? Blue chips run at about 20. Therefore I would pay 10B for craigslist in a heartbeat. I could probably even get a bank to loan me the money.