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Twitter is not showing not much growth in MAUs. Valuation is still high. Market cap is based on future cash flows. No future cash flows (MAUs) means market cap

Twitter is not showing not much growth in MAUs. Valuation is still high. Market cap is based on future cash flows. No future cash flows (MAUs) means market cap has to come down. Just showing profit is not enough. It just shows you can control expenses but does not deserve the huge market cap. This is a $1billion company posing as a $30B company. Anybody disagree?

snowwrestler 8y ago
I propose that MAU growth is a dumb metric for a company that is 10 years old. Companies exist to make money, not attract eyeballs. Plenty of companies make good money without reaching every person in the world, or even a sizable percentage of them.
- pjc50 8y ago
  Unfortunately most tech valuations since the first dot-com boom have been predicated on the assumption that one company will eventually take over the world in a particular market.
- perseusprime11 8y ago
  I agree with the intention of your message but if Twitter is making money from attracting eyeballs, won't it become the metric unless their business model fundamentally changes.
- jiveturkey 8y ago
  Twitter is the type of company that only works due to network effect. Like ebay and facebook. So I'd say the age of the company is immaterial, it's how much of the market they've acquired so far. MAU growth is a fair metric.
  - snowwrestler 8y ago
    Some networks are more valuable than others. Raw MAU tells you nothing about the LTV of those AUs. What's better for eBay: a shitload of people who never buy anything? Or a smaller network of engaged, repeat sellers and buyers? And some networks have negative value. 4chan, despite attracting large traffic numbers and being a well-known cultural force on the Internet, has always struggled to attract advertisers. To maximize financial value of its user network, a parent company must exclude users and content that subtract value. Examples would be lower-LTV users who drive away higher-LTV users via harassment. Or users who post content so objectionable that brands don't want to advertise against it. MAU growth alone tells you nothing about those things.
thewizardofaus 8y ago
That's why I made quick cash shorting FB and TWTR before earnings. Like taking candy from the wall street babies.
- perseusprime11 8y ago
  How do you do it? How much can you possibly make?

snowwrestler 8y ago

I propose that MAU growth is a dumb metric for a company that is 10 years old. Companies exist to make money, not attract eyeballs. Plenty of companies make good money without reaching every person in the world, or even a sizable percentage of them.

pjc50 8y ago
Unfortunately most tech valuations since the first dot-com boom have been predicated on the assumption that one company will eventually take over the world in a particular market.
perseusprime11 8y ago
I agree with the intention of your message but if Twitter is making money from attracting eyeballs, won't it become the metric unless their business model fundamentally changes.
jiveturkey 8y ago
Twitter is the type of company that only works due to network effect. Like ebay and facebook. So I'd say the age of the company is immaterial, it's how much of the market they've acquired so far. MAU growth is a fair metric.
- snowwrestler 8y ago
  Some networks are more valuable than others. Raw MAU tells you nothing about the LTV of those AUs. What's better for eBay: a shitload of people who never buy anything? Or a smaller network of engaged, repeat sellers and buyers? And some networks have negative value. 4chan, despite attracting large traffic numbers and being a well-known cultural force on the Internet, has always struggled to attract advertisers. To maximize financial value of its user network, a parent company must exclude users and content that subtract value. Examples would be lower-LTV users who drive away higher-LTV users via harassment. Or users who post content so objectionable that brands don't want to advertise against it. MAU growth alone tells you nothing about those things.

thewizardofaus 8y ago

That's why I made quick cash shorting FB and TWTR before earnings. Like taking candy from the wall street babies.

perseusprime11 8y ago
How do you do it? How much can you possibly make?