4 ms·
Where did you get that “simple calculation” from? If Average user is worth to TikTok a dollar per day that means that ad buyers are willing to give it to TikTok
by mynegation 6y ago
Where did you get that “simple calculation” from? If Average user is worth to TikTok a dollar per day that means that ad buyers are willing to give it to TikTok from their advertising and marketing budget. Which means that the average user should spend at least few grands each year on advertised products and services, which does not seem likely.
Also, this is not how valuations are estimated. 180 billion _per year_ is a huge amount (for comparison Apple revenue for 2019 is 260B). One applies a revenue multiple that depends on the stage of the company and industry but for early booming social media site is in the range of 20-40. So the estimate of 105-110 probably comes from the range of 3-5 B yearly revenue estimate
- bllguo 6y agolet's not quibble over semantics of "simple" anyway the valuation clearly must include investor perception of their growth trajectory.
- dsmithn 6y agoI think the more appropriate wording would be "completely pulled out of thin air and not relevant calculation"
- wolco 6y agoAn averge tiktok user doesn't make a dollar a day not sure they have the most valuable userbase.
- knackfuss 6y agoYes, that's correct. A dollar per day is huge, and that would bring the valuation close to a revenue multiple of one, which is madness by market standards. If you would make it 10 cents per day, which seems more reasonable according to people more informed than me, that would become simply a multiple of 10, which is still low, as you pointed it out. We can keep changing the variables, divide it by 2 even, but the point i tried to make is that it seems not that crazy of a valuation after all if you consider 500mi users as an average