3 ms·
Things have gotten a little crazy in late-stage "tech" companies. I mean, I understand that some companies need to grow for years before they can become profita
by Ozzie_osman 8y ago
Things have gotten a little crazy in late-stage "tech" companies. I mean, I understand that some companies need to grow for years before they can become profitable, and until then, investors can be OK with your losses growing.
But there are too many of these types of companies. It doesn't make sense. You've got Lyft, Uber, WeWork, and probably a whole host of others who have kept their financials close to their chests.
Maybe one or a couple of these companies figure out how to turn a profit that justifies these losses and valuations. My guess is most of them won't. I only wish I could confidently say which is which.
- brisance 8y agoHoo boy, you should've seen the kinds of "businesses" during the Dotcom boom-bust cycle. :)
- csmeder 8y agoI’m confused, why would they sell large portions of equity (for billions) if they didn’t plan on spending those billions? So by definition any company that raises billions is planning on being unprofitable (by billions) or they wouldn’t raise money right? Companies don’t sell equity for fun, they only do it if they have no other choice (they aren’t profitable yet, or they plan to become unprofitable due to new expansion. For the latter they may be able to raise debt instead of venture capital investment) right?
- Nasrudith 8y agoThey don't think it is worth billions or that their value would drop perhaps? I honestly wouldn't be surprised if WeWork did that just to cargo-cult a successful company.That or it involves a plan of "playing dress up as a successful company" given the sheer "B ark feel" to the place. Other plausible explanations are that WeWork is an embezzlement scheme, fraud, or money laundering operation since nothing about the place makes sense.