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This is not new though. Robert Smith pioneered the idea that while software companies didn’t have tangible assets, they had stable cash flows. In the public ma
by pmart123 7y ago
This is not new though. Robert Smith pioneered the idea that while software companies didn’t have tangible assets, they had stable cash flows.
In the public markets, data providers like IHS Markit, MSCI, etc. have used some debt to rise the returns on equity.
At the end of the day, it’s more about where you define “tech” as cutting edge, or as a software or data business.
- eru 7y agoYes. And the elephant in the room is differing tax treatments for returns on equity vs returns on fixed income. Most jurisdiction allow you to pay interest with pre-tax income but profits are taxed and then used to pay dividends or buy back stock. (Which is pretty silly and self-contradicting, if you combine it with regulation _against_ leverage. Government, please make up your mind which capital structure if any you want to prefer.)