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It's new in the sense that valuations are now compressing on this basis, whereas before, the majority didn't care and we had 50x, 100x sales valued companies
by adam_arthur 4y ago
It's new in the sense that valuations are now compressing on this basis, whereas before, the majority didn't care and we had 50x, 100x sales valued companies
- deleted 4y ago[deleted]
- lotsofpulp 4y agoI think the more accurate statement would be: People are coming to realize that billions in revenue without any kind of margin may not materialize in these business eventually becoming sufficiently profitable, And/or They may not be able to find a bigger fool to buy from them at a high price. Surely all these smart investors already knew retail businesses only earn sub 5% profit margins. They were/are betting on Amazon’s infrastructure as a service, platform as a service, and web services to deliver fat profit margins.