4 ms·
Bubble talk and high valuations comes up every month or so. pud's comment sums it up nicely: Generally, being profitable precludes a company from getting "sill
by jyu 13y ago
Bubble talk and high valuations comes up every month or so. pud's comment sums it up nicely:
Generally, being profitable precludes a company from getting "silly [high] valuations" & buzz in Silicon Valley. Unless they're really, really profitable.
Big valuations usually stem from not knowing how much a company will make once they start charging for stuff. So the "it" crowd works itself into a frenzy and VCs take a big gamble.
But once you make a dollar, all the mystery is gone. You're judged & valued pretty much on your revenue alone. Which is usually low (startups are hard) and unsexy (so not a ton of buzz).
Not saying a agree with it. But that's how it is.
https://news.ycombinator.com/item?id=5236239 https://news.ycombinator.com/item?id=5236239
- adventured 13y agoThe most interesting thing, to me, about the current valuations, is where they're going to be in another 6 or 12 months of this momentum. Yellen is highly likely to maintain the negative interest rate environment for years to come, and that should encourage a stock market move even higher. Motivated bull markets never stop at a bit above historical average values. They go a lot higher, become quite irrational, and then crash. As it is already, about 85% of the gains in the market over the last two years have been pure PE expansion, as earnings growth has tumbled to low single digits. I expect valuations for tech companies across the board to get significantly frothier before the music stops again. If a company like Snapchat is worth $3.x billion today, I see no reason to think capital won't bid it up to $5 or $10 billion over the coming year, assuming the very accommodating environment continues.