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I personally am not really sure that FB and Twitter will ever find a way to make huge profits and become sustainable large businesses but looking at the market
by grey-area 13y ago
I personally am not really sure that FB and Twitter will ever find a way to make huge profits and become sustainable large businesses but looking at the market it's clear that investors share this uncertainty.
That's not at all clear to me, could you share your reasoning? There are many large SV companies with very high valuations and negative or very low profits in comparison. Companies like Twitter and FB look to me to have a lot of future profit baked into their current valuation - around 100 years worth in the case of FB, and infinite years in the case of Twitter or many other tech stars like snapchat - that's not very realistic and is pretty frothy. Ordinary people are taking a leap of faith and investing in these companies without solid profits to back it up. I'm not persuaded we're in a very rational market right now, given the doldrums the US economy is experiencing, which is a sharp contrast to the new stock market highs we have recently seen.