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Say big green gives a company $100M with the rider that it needs to spend all that on nvidia's hardware in exchange for 10% of the company. Has Nvidia valued t
by JonChesterfield 3y ago
Say big green gives a company $100M with the rider that it needs to spend all that on nvidia's hardware in exchange for 10% of the company.
Has Nvidia valued the company at 1B? Say their margin is 80% on the sales. So Nvidia has lost some cashflow and $20M for that 10%. Has Nvidia valued the company at $200M?
- SeanAnderson 3y agoI see :) Thanks for clarifying. I would say that I don't have a strong enough grasp on biz finances to do more than speculate here, but: 1) Is all the money spent up front? Or does it trickle back in over a few years? Cash flow might be impacted more than implied, but I doubt this is much of an issue. 2) I wonder how the 10% ownership at 2B valuation would be interpreted by investors. If it's viewed as a fairly liquid investment with low risk of depreciation then yeah, I could see Nvidia's strategy being quite the way to pad numbers. OTOH, the valuation could be seen as pure marketing fluff and mostly written off by the markets until regulations and profitability are firmly in place.