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Or, no discernible repeatable method for generating income to ever justify a given valuation. Either one though...

• dangero 13y ago
  This is exactly the rebuttal that was given for Facebook 2 years ago. Facebook has been hitting or besting their numbers since IPO. Yes, creating a valuation for a company that doesn't make money is going to be somewhat inaccurate, but companies that solve the chicken egg problem and gather mass have great value in the digital age. Even if you take an example of a website that failed like Myspace, they made enough revenue off ads to justify their valuation before they tanked.
  • bedhead 13y ago
    Facebook clearly had something two years ago. In 2011 they managed to generate almost $1 billion in free cash flow on almost $4b billion in revenue...obviously there is a business model in there somewhere, even if its valuation is debatable (when isn't it?). Pinterest however, as I understand it, doesn't generate any revenue let alone any profits. It's the whole minor formality of zero freakin revenue that's the tip-off that something is hugely amiss with Pinterest as a capitalistic enterprise.