A team at Morgan Stanley or wherever looks at the company's numbers (cash flow, debt, growth rate, etc), and comes up with a valuation based on very concrete fa

A team at Morgan Stanley or wherever looks at the company's numbers (cash flow, debt, growth rate, etc), and comes up with a valuation based on very concrete factual information. What if I told you that these "concrete factual information" numbers are just as made up as Daily Active Users, Monthly Active Users, number of downloads, etc. It doesn't matter what the number is, it's just whatever the market values. Right now the market values the numbers behind DAU, MAU, because well... Facebook and Google exist. They set the precedent of valuing MAU/DAU and have made money doing it, so the assumption is that any other company that also values these same metrics should follow suit. Where I think we are in full agreement is the fact that DAU/MAU is not fungible. Meaning, the same 3hrs a day someone uses Facebook isn't the same 3hrs that someone uses twitter. But, lest we forget, the market is irrational. EDIT: The fact that this "Mattermark" number exists explains the story even better than I can: http://mattermark.com/wordpress/wp-content/uploads/2014/02/fundersclubporfolio.png http://mattermark.com/wordpress/wp-content/uploads/2014/02/f...