4 ms·

I can't believe I'm the first to point this out, but this article is kind of obviously wrong. The analysis in the article is like looking at Tesla on an earnin

I can't believe I'm the first to point this out, but this article is kind of obviously wrong. The analysis in the article is like looking at Tesla on an earnings per share basis, when it's actually heavily priced on forward projected earning potential. Like Tesla, Tiktok is a growth stock. This valuation doesn't reflect its current value per user - it's baking in an implied doubling or trebling of its user base in some short time span. I'm not saying that the assumption that Tiktok will meet its projections (and justify this valuation) is warranted, but I am saying that comparing Tiktok's $/user to Facebook, a mature/somewhat stagnant social network, is the wrong way to look at this.

oefrha 6y ago
You're not the first to point this out ;) https://news.ycombinator.com/item?id=24081449 https://news.ycombinator.com/item?id=24081449
- propter_hoc 6y ago
  Haha I saw that after I refreshed the page! You beat me to hitting post by a couple of minutes, because I wrote a longer post than you did :)
seven4 6y ago
True... though "588/user" is more digestable than "588/current user but likely accounting for future growth which is why there is a premium - though we can't be sure that userbase does continue to grow considering the cloud of uncertainty around this deal and that the user base is largely gen z/particularly young and it is not proven that they will be sticky" They go on to acknowledge the growth profile and valuation multiples vs competitors based off projected profits ...which is probably the more useful way to look at it - There have been reports of investors valuing TikTok around $50 billion in the takeover bid, this is approximately 50 times its projected revenue for 2020. Many publications have compared this to SnapChat’s market capitalization which sits around $33 billion at the moment (15 times its 2020 projected revenue). While Snapchat exists within the same social media ecosystem the comparison has to account for two factors. 1) TikTok vs Snapchat’s position in the growth cycle 2) TikTok vs Snapchat’s core proposition
panarky 6y ago
Assuming the 800 million user base trebles, is $196 per potential future user a reasonable valuation?
rasz 6y ago
I mean its not even close to broadcast.com $10,000 per user, and that one turned out great!

oefrha 6y ago

You're not the first to point this out ;) https://news.ycombinator.com/item?id=24081449 https://news.ycombinator.com/item?id=24081449

propter_hoc 6y ago
Haha I saw that after I refreshed the page! You beat me to hitting post by a couple of minutes, because I wrote a longer post than you did :)

seven4 6y ago

True... though "588/user" is more digestable than "588/current user but likely accounting for future growth which is why there is a premium - though we can't be sure that userbase does continue to grow considering the cloud of uncertainty around this deal and that the user base is largely gen z/particularly young and it is not proven that they will be sticky" They go on to acknowledge the growth profile and valuation multiples vs competitors based off projected profits ...which is probably the more useful way to look at it - There have been reports of investors valuing TikTok around $50 billion in the takeover bid, this is approximately 50 times its projected revenue for 2020. Many publications have compared this to SnapChat’s market capitalization which sits around $33 billion at the moment (15 times its 2020 projected revenue). While Snapchat exists within the same social media ecosystem the comparison has to account for two factors. 1) TikTok vs Snapchat’s position in the growth cycle 2) TikTok vs Snapchat’s core proposition

panarky 6y ago

Assuming the 800 million user base trebles, is $196 per potential future user a reasonable valuation?

rasz 6y ago

I mean its not even close to broadcast.com $10,000 per user, and that one turned out great!