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The Dot-Com 2.0 Tech Buying Spree (In 1 Simple Chart)
The last few years have seen the high-tech darlings spending their freshly printed funny-money currency (shares) on all sorts of money-making (but mostly losing) ideas...
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We are sure this will all end well...
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BUbbly
These are not arms-length deals. Just VC/banker cronies shoveling their fiat from one hand to the other.
I have a pre-revenue tech company and one banker is pushing for an IPO this year.
Go on and take your money and run. Your time is running out, fast.
I have a pre-revenue tech company and one banker is pushing for an IPO this year.
> "These are not arms-length deals."
Good point.
momo bottomed today <<<<<<<<<
dead cat bounce <<<<<<<<<<
Apple actually seem very impressive for largely generating home grown success without buying in whole chunks...Nice and informative chart. Thanks zerohedge :)
That $19 billion Whatsapp purchase makes Zuckerburg look seriously stupid...I mean couldn't he have just poached a few programmers to steal their code?? Whatsapp seriously doesn't seem to offer anything unique that others can't quickly steal/copy?? It's just got a silly name...but I guess the retards at Facebook know all about silly names... Very dumb move. Whereas Google's Boston Dynamics truly produce unique robots with DARPA level expertise. Much better value for money.
Apple generates 'innovation' through ruthless inter-group-NDAs and an overall operational structure and method of secrecy and pitting people and groups against each other. It's not particularly a happy place to work at.
I've heard that before.
We should build a public school system modeled on that structure.
The last thing we need is overpriced, arrogant, overcomplicated minimalism for union schools. Ok, more arrogant and overcomplicated....
Looking forward to the day someone has to do a impairment charge on all this booked goodwill. Given how exposed the big guys like Blackrock and Fidelity are to this tech boom, it's going to really suck when someone finally blows up the Zuck machine.
Chart for FB is ignoring all the bolt on acquisitions and patent purchasing he did while a private. If you add those in, he did about 1 a year until IPO, very little of FB seems to be built organically. Which questions what do they spend all day coding.
Have we actually seen anything come to market from Facebook yet ? I mean everything he has done since the IPO is spend money with no updates or actual value add, his ROE and ROA is falling along with his margins and user base. He has refused to disclose any decline curve metrics or respond to the long standing question on fake accounts / closed account tracking.... so, where's the beef ?
Kind of makes me wonder where is Dan and Carl on this one. I would think there is much more juice in forcing Zuck to hit his numbers or grow without issuing dilutive stock than any single Sony corp rampage.
The value in Whatsapp is in their user base, and a gamble on that user base (or a sizeable portion of it) continuing on to pay for the service. They also have an incredibly small and efficient team, around 30 people I think. It's a business unit that is pretty much guaranteed to pay for itself ten times over in operating cashflow terms, and if the growth/retention targets are hit it's an acquisition with considerably better earning/price multiple than Facebook itself.
I think Zuckerberg sees the writing on the wall for web 2.0 valuations, which is why these deals are being completed primarily with stock, rather than cash. It might look frivolous to an outsider, but he's got access to the best strategic advisors in Silicon Valley. Which is also why he runs a company with a $150+ billion market cap, and you are just sitting at home bitching about it from the sidelines.
Whatsapp user base = Facebook user base
"continue on to pay for the service" = vapor
Drunkenpleb, a couple of things sound retarded with your Whatsapp analysis:
1. If users pay for the service, then what's the point of using it over all the other services that are available? (free was the big feature)
2. If whatever you say about Whatsapp valuation is true, shouldn't YouTube have sold for hundreds of billions??
Most of these companies are just a UI on top of a database with a goofy company name. No real IP or differentiation. The day of reckoning is not too far off.
More realistic than bio-tech.
Somebody has to win the game, and the game is spending money on "concepts", and hoping one of the "concepts" turns into the next [telephone | TV | radio]. Whoever buys that "concept" wins BIG.
Not much different than buying movie "concepts".
Somebody has to win.
its remarkeable all you zero morons can read everyday about the completely bullshit value of stocks, but then in the same breath you are unable to divorce a "2 billion dollar deal" from 400 million of real money and 1.6 billion "worth" of 23 million worthless share of faceshnook stock.
they paid 400 million and their shareholders diluted out paid the rest. so no. they didn't pay 2 billion dollars. morons.
i'm tired of correcting your fucktards.
Believe me, fonestar gets tired of correcting them too.
Nothing feeds a bubble like increasing oil production.
So will the bubble pop before US oil production peaks again or just after?
I take that back. Printing more US dollars per quarter than existed in 1980 will create bubbles too.