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comment by kleinbl00
kleinbl00  ·  3129 days ago  ·  link  ·    ·  parent  ·  post: Uber might be forced to behave like a company, rather than a slave driver

So check this out. I love this. You know how Warren Buffet will buy things because he thinks they're worth money in the long run? Turns out that's not actually common sense, it's "firm foundation theory." on the other hand, it turns out Greater Fool Theory is not only a thing, it's the fundamental principle John Maynard F'ng Keynes used to explain the stock market.

Keynes straight up said that it doesn't matter what a stock is worth, it's what you can sell it for. In other words, Uber is worth $40B because the consensus is there are enough idiots in the stock market that Uber stock could be sold for $40B. This is how Reddit ends up with a half billion dollar valuation - the VC firms in the Valley figure there are enough idiots out there buying stock that a scandal-ridden BBS full of creepshots and racism is worth half a billion dollars to Ma and Pa Daytrader.

Kind of amazing when you think about it, but also accurate - somebody made a stone-cold killing off of Pets.com. It just wasn't most people. SO: Uber is worth $40B for exactly long enough for someone big to say "no way is Uber worth $40B" and someone else to short Uber to $30B and inverse tech ETFs to push Uber to $20B and "consumer sentiment" to push it down to $10B and before long it's a joke but in the mean time... Yeah.

One of the analysts I follow recently pointed out that Shake Shack has a higher valuation than the entire coal industry. Valuations clearly aren't based on fundamentals.





user-inactivated  ·  3128 days ago  ·  link  ·  

    Keynes straight up said that it doesn't matter what a stock is worth, it's what you can sell it for. In other words, Uber is worth $40B because the consensus is there are enough idiots in the stock market that Uber stock could be sold for $40B.

And this explains how Whatsapp and Snapchat have a stock valuation worth more than the cost of the servers.

kleinbl00  ·  3128 days ago  ·  link  ·  

Exactly. "Zuckerberg paid how much for Whatsapp? Well clearly some chucklefuck will pay at least a third that for Snapchat..."

xofaith  ·  3128 days ago  ·  link  ·  

francopoli exactly, this. I don't disagree with you at all. It all needs to just die in a fire. I like that phrase. I should use it more. Perhaps on another site that shall not be named, because those users do not contribute useful content. / end total rant of everything wrong in the world.