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> Sure, he says, Uber is a great business and a great company. But $41 billion? Now? Maybe in a few years time. If that's the best evidence you can come up wit

> Sure, he says, Uber is a great business and a great company. But $41 billion? Now? Maybe in a few years time. If that's the best evidence you can come up with, it's not a bubble, it's an overvalued market at best. Uber's valuation collapsing even to, say, 15B, is not a bubble popping in any meaningful sense, and nobody can deny that there's a business there. In 2000, that we according to this mysterious CEO can't remember, companies with barely any customers, next to no revenue, massive deficits and not even a coherent business plan achieved billion-dollar valuations.

mcguire 11y ago
I was actually kind of surprised by that Uber comment. Sure, it's a completely worthless number, but then the market cap of Ford isn't much more real and it's $61B. So someone thinks Uber is worth a significant chunk of the total value of the industry on which it is built. [Side note: F is paying ~4% dividends. Hm.] Anyway, did you see the other evidence presented? Cherry picking: * Interest rates * Private valuations not matching public ones * Tech startups offering stock at a discount (If that's more than a one-off idiocy, well, ew.)
mason55 11y ago
> But $41 billion? Now? Maybe in a few years time. Here's the other thing. If you're investing in a startup you're not putting your money in based on some current metric like 3x booked ARR and saying you expect it to throw off enough to cover your investment. The whole idea is that you think it can grow into the valuation you're putting your money in at, that's where the risk is. If the market believes that Uber is going to grow into a $41B company then that's what it's going to get priced at right now, even if they're not currently "worth" that much based on some present value formula. It's the same way that product announcements don't generally move stock values - those products were already priced in.

mcguire 11y ago

I was actually kind of surprised by that Uber comment. Sure, it's a completely worthless number, but then the market cap of Ford isn't much more real and it's $61B. So someone thinks Uber is worth a significant chunk of the total value of the industry on which it is built. [Side note: F is paying ~4% dividends. Hm.] Anyway, did you see the other evidence presented? Cherry picking: * Interest rates * Private valuations not matching public ones * Tech startups offering stock at a discount (If that's more than a one-off idiocy, well, ew.)

mason55 11y ago

> But $41 billion? Now? Maybe in a few years time. Here's the other thing. If you're investing in a startup you're not putting your money in based on some current metric like 3x booked ARR and saying you expect it to throw off enough to cover your investment. The whole idea is that you think it can grow into the valuation you're putting your money in at, that's where the risk is. If the market believes that Uber is going to grow into a $41B company then that's what it's going to get priced at right now, even if they're not currently "worth" that much based on some present value formula. It's the same way that product announcements don't generally move stock values - those products were already priced in.