3 ms·

I have all the same concerns regarding pollution, but Bitcoins rise has made me think a lot about the 'value part' in other stocks. If Bitcoin's price can get

by treve 4y ago

I have all the same concerns regarding pollution, but Bitcoins rise has made me think a lot about the 'value part' in other stocks. If Bitcoin's price can get this high without the 'intrinsic value' or producing something, then this effect probably also exists for other stocks. And this made me wonder: how big of a factor is this in other tech companies. The more I think about it, the more I feel that it must be the majority for many of them. Many companies operate at a loss and are just pumped up to push up metrics, just so someone else will pay more for it in the next round.

yata69420 4y ago
When you realize what dollars are, you're really going to freak out.
pigtailgirl 4y ago
same thing happened in March 2000 - browsers with no products and domains with no users were public - https://www.youtube.com/watch?v=25_WjiZnvQk https://www.youtube.com/watch?v=25_WjiZnvQk first dot com crash tech learned you actually need a product when the markets go south - now (second) tech is learning you need an actual good product when the markets go south --
majormajor 4y ago
Yeah, people have bought stocks on future expectations - specifically, future expectations of being able to sell it for more than they bought it, and for more than if they bought something else instead - for quite a long time, compared to buying just on what has already happened. But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process. The fundamental case for bitcoin-as-an-investment[0] is much less well-defined, and differs far more depending on who you ask. [0] bitcoin-as-currency is a different frequently-talked-about potential future state, but not as relevant to the "acting like a tech stock" discussion
- treve 4y ago
  > But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process. This makes sense to me, but I wonder how many VCs will pump money into a business, having a pretty good hunch that the business model will never make that much sense at a meaningful scale, but the numbers will probably look good enough for a return of investment until the pyramid collapses after the series C. These companies are restructured for increase of perceived value, not multi-decade sustainability. Bitcoin to me is just the purest form of this culture.
  - majormajor 4y ago
    I would bet money that this has happened a TON over the last decade, just as you say. Especially post-Uber where "hypergrowth" to get market dominance was all the rage even in extremely cost-heavy, lower-margin industries where scaling was always gonna be a big challenge. If there's good news, though, it's that this appears to be slowing down. Lot of folks getting disillusioned with WeWork, Uber, etc now that those exits happened and went nowhere. I'm assuming investors are realizing they won't be able to play that trick too many more times.
- boppo1 4y ago
  >concrete financials laughing in adjusted ebitda But really, I'd hardly call QE-driven financials "concrete". We Work, anyone?
  - majormajor 4y ago
    How was WeWork QE-driven? It's financials were just plain bad, no? The story was that "scale + tech = magic" would happen at some point. The story didn't work. Everyone knew that it hadn't happened yet, though, as far as I recall. You saying "I don't trust an adjusted ebidta metric" is perfectly valid, of course, but that number was there and the business processes behind it were there. A bit different from "i'm a bunch of bits stored on a computer."

by treve 4y ago

yata69420 4y ago

When you realize what dollars are, you're really going to freak out.

pigtailgirl 4y ago

same thing happened in March 2000 - browsers with no products and domains with no users were public - https://www.youtube.com/watch?v=25_WjiZnvQk https://www.youtube.com/watch?v=25_WjiZnvQk first dot com crash tech learned you actually need a product when the markets go south - now (second) tech is learning you need an actual good product when the markets go south --

majormajor 4y ago

Yeah, people have bought stocks on future expectations - specifically, future expectations of being able to sell it for more than they bought it, and for more than if they bought something else instead - for quite a long time, compared to buying just on what has already happened. But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process. The fundamental case for bitcoin-as-an-investment[0] is much less well-defined, and differs far more depending on who you ask. [0] bitcoin-as-currency is a different frequently-talked-about potential future state, but not as relevant to the "acting like a tech stock" discussion

treve 4y ago
> But they still use concrete financials (e.g. growth of revenue is just the derivative of revenue) to make those decisions, and are assuming that the future buyers will be looking at similar numbers that are based in the same real economic business process. This makes sense to me, but I wonder how many VCs will pump money into a business, having a pretty good hunch that the business model will never make that much sense at a meaningful scale, but the numbers will probably look good enough for a return of investment until the pyramid collapses after the series C. These companies are restructured for increase of perceived value, not multi-decade sustainability. Bitcoin to me is just the purest form of this culture.
- majormajor 4y ago
  I would bet money that this has happened a TON over the last decade, just as you say. Especially post-Uber where "hypergrowth" to get market dominance was all the rage even in extremely cost-heavy, lower-margin industries where scaling was always gonna be a big challenge. If there's good news, though, it's that this appears to be slowing down. Lot of folks getting disillusioned with WeWork, Uber, etc now that those exits happened and went nowhere. I'm assuming investors are realizing they won't be able to play that trick too many more times.
boppo1 4y ago
>concrete financials laughing in adjusted ebitda But really, I'd hardly call QE-driven financials "concrete". We Work, anyone?
- majormajor 4y ago
  How was WeWork QE-driven? It's financials were just plain bad, no? The story was that "scale + tech = magic" would happen at some point. The story didn't work. Everyone knew that it hadn't happened yet, though, as far as I recall. You saying "I don't trust an adjusted ebidta metric" is perfectly valid, of course, but that number was there and the business processes behind it were there. A bit different from "i'm a bunch of bits stored on a computer."