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Perhaps "But the valuation ended up lower. Why?" is answered by this: "Speculation was that they’d hit $100 million in revenue this year. Our best guess based
by mikeryan 15y ago
Perhaps "But the valuation ended up lower. Why?"
is answered by this:
"Speculation was that they’d hit $100 million in revenue this year. Our best guess based on discussions with sources is that revenue will be more like $30 million in 2011. But this is still largely a guess."
A valuation at 133x revenues is, well wow.
I say this as big fan of dropbox as a service and a business but I'm not a fan of these monster valuations on the come.
Also should point out there's a lot of speculation in that article and those which preceded it.
- revorad 15y agoI think the key words there are "But this is still largely a guess.".
- abbasmehdi 15y agoYou're looking at their revenue and valuation in absolute terms, as a snapshot. Look at it in relativity, like a movie not a photograph. They are on an upward trajectory, what was 13000% last year, is 1330% this year, and might be 800% next year.
- yumraj 15y agoOne of the simplest ways to do valuation is to look at Free Cash Flow (FCF) or Discounted Cash Flow (DCF) and then divide it by (discount rate - growth rate). Now, if the growth rate is fairly large, the denominator becomes very small and can drive even a moderate FCF to cause a very high valuation, which is what seems to be happening here. If interested search for FCF valuation, etc. there's a lot of info out there.