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Serious question: If they were "tightening the belt," wouldn't their expenses go down? Why would they lose over a billion dollars over two years before going pu
by teachrdan 6y ago
Serious question: If they were "tightening the belt," wouldn't their expenses go down? Why would they lose over a billion dollars over two years before going public if they weren't showing hockey stick growth?
- gen220 6y agoNot necessarily. Expense is an important figure, but the ratio (operating expense : revenue) is more important, IMO. They need to demonstrate they can grow revenues without a proportional growth to operating expenses, and that they can sustain this trajectory until revenues > operating expenses. An operating expense:revenue ratio of 107% (i.e. you spend 1.07 for every 1.00, which is their H1 2020 numbers) is bad in isolation. But when it was 157% at the same time last year? The fact that they could move from 157% to 107% while significantly growing revenue is a very positive signal.