Amazon was at 44x sales at the height of dot com. But it was tiny back then. Of the big caps I think Cisco was the most insane. It peaked at 37x sales. I am checking Tesla price every day now even though I don’t own it. To me that’s the bellwether, sorta like the Cisco of the dot com days.
Tesla’s PS is 22.36 today.
This VC guy said Doordash can go 10x from current valuation.
You forgot Soyabeans. i am looking for Soyabean IPO.
With current working from home. World will be overproducing Software programmers. that will create even more unicorns. why become a doctor or Dentist? and work on patient schedule with physical and mental strains.
Our CFO is all about the 20x revenue number. He’s ex Goldman, so he’s very tied into their valuation models. I feel a bunch of these companies will hit market saturation the way Fitbit or GoPro did. Then people realize they aren’t worth the valuation and boom. Leaders know that, so it creates a grow at all cost mentality.
Why not 100X? 1000X?
Let’s be reasonable here.
But Cisco was making money… the current crop of companies seem to be competing on how fast they can burn cash. They have switched from burning VC cash to cash raised in the public market.
Cisco was already well established back then. That’s why I think we should compare it with something like Tesla, but not the ones that just IPO’ed this year. Tesla is making profits.
Amazon was a young company back then and losing money hand over fist. I’d be very hesitant to write off Airbnb and doordash just because they are losing money today. We have seen this movie too many times.
Amazon’s market cap was tiny thought. Now these companies are worth $100B while losing tons of money. I don’t see a path to $1T so they can be a 10x stock. That’s why I’m sticking to smaller cap ones.
Looks like ABNB allows employees to sell up to 15% of vested share in first 7 days. More ammunition for BA realestate.
Airbnb has strong network effect. If Tesla can be worth 600B I don’t see why ABNB cant be 1T in the future. I mean who are their competitors? Vrbo? Traditional asset heavy hotels? ABNB owns the category it created.
Of course I’d love to see it pull back some before jumping in. There is too much euphoria in the market right now.
I’m skeptical when young firms have a much higher market cap than established firms which have much higher revenue and profits. ABNB is now worth more than Marriot, Hyatt, and Hilton combined. Industry revenue isn’t going to 10x, so how does ABNB 10x? They need to take market share from existing players. Now if they drive those companies to zero that’d double their market cap. They should get some multiplier for having a better gross margin, but it’s not enough to 10x from destroying 3 companies.
I guarantee if you did a blind P&L test of these recent IPOs vs. older companies then reveal the market caps people would think it’s insane. It’s all about the emotional hype behind the name. These things can last far longer than people think but inevitably end really badly.
I’m expecting a Dotcom bust 2.0. I don’t know when so I may or may not be nimble enough to jump out unscathed. I fully expect some of the cloud stocks I own go down to ZERO.
We already saw a bunch basically go bust a few years ago. It’s when the revenue growth stops. That’s when the stock implodes. The one good thing about subscription model is the revenue growth should gradually slow vs hardware companies which have an abrupt stop.
Traditional hotels have crap ton of deprecating physical assets and millions of employees with low productivity. That’s why ABNB will have a much higher market cap than legacy players. It plays a completely different game.
It also has huge legal risk that hotels don’t have. Some cities have banned it.
Hotels have too much facilities and services that most travelers don’t need.
Rooms share air-ducts! Not good during Covid pandemic.
Looking at the more recent big cap and money losing IPOs
Uber - only recently went above first day price
Slack - was below first day price until acquisition and covid is a huge benefit to them
Lyft - below first day price
Pinterest - it’s more than doubled
Spotify - it’s more than doubled
Docusign- it’s up over 5x
Dropbox - it’s down
Snap - it took 3 years to surpass first day price
Cloudera - it’s down
Pinterest, Spotify, and docusign all have positive operating cash flow and strong revenue growth. The ones with the highest market cap on the first day have sucked as investments.
There was, in fact, notable millennial interest in DoorDash and Airbnb on their first days of trading, according to TD Ameritrade’s chief strategist, JJ Kinahan. In a “Squawk Box” interview Friday, Kinahan said about 41% of DoorDash’s trades on his brokerage’s platform were from millennial clients while for Airbnb it was about 45%.
RHers! Every stock RHers touch is worth 2x to 10x more. Where is the next stock?