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This doesn't really directly address the issue of valuations for the unicorns. P/E valuations are probably insane by most metrics - the type of user base growth
by TTPrograms 11y ago
This doesn't really directly address the issue of valuations for the unicorns. P/E valuations are probably insane by most metrics - the type of user base growth required to get them in line (P/E wise) with other companies is on the order of double-digit percentages of the global population IIRC.
This doesn't really mean there's a "tech bubble", though. It's possible we'll see a massive correction to those companies, but it will likely be isolated, and thanks to the weird structuring of these private equity deals I can't imagine that the VCs will be much worse off.
- encoderer 11y agoFacebook revenue grew 8000% from 2007 to 2014. Clearly not all "unicorns" will perform this well. And maybe none will. But possibly they avoided discussion of these companies' P/E because the data is both unavailable and unreliable given their size? It's not just a canard that these companies are "not focusing on revenue".
- nemo44x 11y agoWe've already seen many isolated corrections in the public market over the last few years. 3D printing has corrected in a massive way. Biotech had a big correction a bit over a year ago, however it has recovered and continues to rally. Solar suffered a correction recently and many small to mid-cap technology companies had a correction about 1.5 years ago too. Apple even saw an isolated correction a couple years ago. That is one reason I believe the public markets are in fact healthy. Sectors have been allowed to correct on their own instead of everything just failing in a systemic way.