Valuation is not the same thing as revenues per year. Or profit per year.
an easy example: if facebook made 15B per year with 5B in profit, they could distribute dividends of the 5B each year to stockholders. In only 3 years, your original investment would be paid back and it would be all profit (to the investor) from that point on.
Would you think that was a good deal? I would! So good that it'd get bid up on the open market way past 15B.
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Valuation is not the same thing as revenues per year. Or profit per year.
an easy example: if facebook made 15B per year with 5B in profit, they could distribute dividends of the 5B each year to stockholders. In only 3 years, your original investment would be paid back and it would be all profit (to the investor) from that point on.
Would you think that was a good deal? I would! So good that it'd get bid up on the open market way past 15B.