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How the heck a company can continue to run without being profitable is beyond me.
by torgian 6y ago
How the heck a company can continue to run without being profitable is beyond me.
- bidirectional 6y agoBecause investors believe that the equity of the company is undervalued compared to the future cash flows. I'm sure plenty of poor investments have been made on this basis and you can't keep it going forever, but it seems pretty sensible that in some cases a company has great future earning potential without present profits. Especially on a site run by a firm specialising in such investments!
- yardie 6y agoI think it's the assumption that there is a market there and if they can outlive and outspend the competition, eventually, they'll have it all to themselves.
- torgian 6y agoI understand this, but at some point you would think investors would cut their losses. I mean... _years_ without profitability. That's a long time.
- yardie 6y agoReal estate is worse. I've watched developers sit on property for decades. Slowly buying up property around them as it comes up for sale. Just so they can build a fancy strip mall. If you try to bring rationality to money you're going to lose. None of it really makes sense and the rules get rewritten all the time.