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Can someone explain how deeply unprofitable companies can go public and somehow do well? I understand that companies are able to pull Mitt Romney's and do terr
by toolz 12y ago
Can someone explain how deeply unprofitable companies can go public and somehow do well? I understand that companies are able to pull Mitt Romney's and do terrible things to make money with companies that were losing money every year, but how does it happen that people want to buy stock of a company that is losing so much money? Do I even want to know?
- briandear 12y agoWith New a Relic revenue growth rates are greater than the increase in loss rates. I bought a few hundred shares of New Relic because the financials are actually very strong. There's a lot more going on than simple profit/loss statements, it has to do with rates as opposed to simple hard numbers. As successful as Amazon is, they STILL aren't profitable, yet I bet everyone here wishes they had Amazon IPO shares. The Mitt Romney comment is rather ignorant. There are many, many major companies that were rescued by Bain. A simple minded view of that industry is to do a discredit to the companies that thrived because of Bain. Staples, Guitar Center, Dominoes Pizza, the list goes on. If it weren't for Mitt Romney, there's be dozens of companies that would have simply gone bankrupt. Business isn't around to be a public service, it's sole purpose is to make a profit; with those profits, they are able to provide people with jobs. If Apple didn't make a profit and closed down, imagine how many people in our community would be out of a job. Profit provides an incentive to operate. I don't make a living writing computer code for charity; our livihoods depend on profit, like it or not.