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Stripe is cool -- I use it every day -- but is it really worth, oh, half a Goldman Sachs? I dunno man.
by kchoudhu 7y ago
Stripe is cool -- I use it every day -- but is it really worth, oh, half a Goldman Sachs?
I dunno man.
- rolltiide 7y agoPrivately traded companies and publicly traded companies use different terminology for the same things. In the private markets "valuation" is a term that just means "someone bought a couple shares at this arbitrary price, here are the value of the other millions of shares at that same arbitrary price". Although the effects on all shareholder's balance sheets are real and useful, it is just broadcasted for marketing and hype. In the public markets "marketcap" is the same term. And finally, older public companies have low price to equity ratios because the hype has fizzled and they are predictable. It doesn't mean anything. Its not enough inputs alone for you to decide what the rest of the market will do.
- tempsy 7y agoSquare is $25b and was trading at above $40b at some point within the last year.
- mathattack 7y agoA couple thoughts on why this isn’t a fair comparison: - Goldman is profitable but the employees extract most of it via compensation. - Goldman has to rewin their business every year. Very little recurring revenue and they are one recession from imploding. - You can’t really compute valuation on a very small investment. It’s not like the entire float is trading, and the small investment (relative to valuation) can have all kinds of liquidity preferences and special rights.
- tryitnow 7y agoI think your third point supports the OP original point. Stripe probably isn't "really" worth that much now. EDIT: wanted to mention that my impression is that they're a great company, just not worth $35B.
- mathattack 7y agoThey are great. Don’t undersell the benefit of recurring revenue. Compare the valuations of credit card companies vs GS too.
- jamiegreen 7y ago- Goldman has to rewin their business every year. Very little recurring revenue and they are one recession from imploding. Haven't they weathered a fair few recessions already?
- mathattack 7y agoThey weathered the last one. Lehman and Bear didn’t.
- mylons 7y agohow often do you use goldman sachs?
- Stevvo 7y agoPayPal is a $100 billion dollar company. They have roughly 1/3 the market share of PayPal. Stripe is the better product.