I read this article
(http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETBG/2011/02/11&PageLabel=1&EntityId=Ar00102&ViewMode=HTML&GZ=T) today which mentions that Twitter is valued at about $8 billion. I think its revenues are about a $100 million (http://en.mercopress.com/2010/12/21/in-less-than-a-year-twitter-s-value-has-soared-to-3.7-billion-usd).
I wonder why someone would pay a price of 80 times its revenues. Mind you, we are not talking about earnings here. We are talking about a valuation of 80 X annual revenues.
What is the investor chasing? Where is the intrinsic value? The investor would make money only if he can unload his investment to another investor who is ready to pay an even more exorbitant amount.
I wonder if the investors haven't gone crazy.
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