It won't matter in the present environment. They'll sell the story, the user growth, the demographics, the revenue potential. It's the same premise supporting Twitter's incredible valuation, which is entirely contrary to its actual business fundamentals.
It'll matter later, when the correction Spiegel is predicting finally arrives.
That's when Snapchat goes from being worth $18 billion in the public market, to being worth $4 billion. This story repeats over, and over, and over, and over again; and every time, half of people are off by years in predicting an imminent correction, and the other half don't think a correction will ever come (or that we're just at the beginning etc).
Do you think every investor is going to read that before considering buying? That's a serious question, as I don't see any reason to have such a great amount of faith considering the previous tech bubble.
No that won't matter, imho, because it's not a value-based investment. It's a growth investment and the only question that needs to be answered is - will the stock go up? An S-1 on a company that has no profits and very few hard assets will tell you very little. But that won't stop investment, because that's not what they're looking for.
Well I would argue if they're positioning it as a growth based investment, that's a huge red flag to you, the potential investor. But of course, some people will believe in their story.
It would only be a red flag if I was a value-based investor. Warren Buffet won't be there in other words. But if revenue, profit, earnings, and assets were the only metrics used for investment the stock market would be tiny compared to where it is today.
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But they will realize if they have value or not when they read the S1 filing required to IPO.
It won't matter in the present environment. They'll sell the story, the user growth, the demographics, the revenue potential. It's the same premise supporting Twitter's incredible valuation, which is entirely contrary to its actual business fundamentals.
It'll matter later, when the correction Spiegel is predicting finally arrives.
That's when Snapchat goes from being worth $18 billion in the public market, to being worth $4 billion. This story repeats over, and over, and over, and over again; and every time, half of people are off by years in predicting an imminent correction, and the other half don't think a correction will ever come (or that we're just at the beginning etc).
Do you think every investor is going to read that before considering buying? That's a serious question, as I don't see any reason to have such a great amount of faith considering the previous tech bubble.
No that won't matter, imho, because it's not a value-based investment. It's a growth investment and the only question that needs to be answered is - will the stock go up? An S-1 on a company that has no profits and very few hard assets will tell you very little. But that won't stop investment, because that's not what they're looking for.
Well I would argue if they're positioning it as a growth based investment, that's a huge red flag to you, the potential investor. But of course, some people will believe in their story.
It would only be a red flag if I was a value-based investor. Warren Buffet won't be there in other words. But if revenue, profit, earnings, and assets were the only metrics used for investment the stock market would be tiny compared to where it is today.