Apparently, Twitter is worth $4-billion, which means that the number of users has far, far more value than the fact it hasn’t figured out a way yet to make money.
According to SharesPost, which is a secondary market to buy and sell stock in private companies, Twitter is worth $4-billion, which is a $300-million jump in the last month.
It is important to keep in mind that SharesPost is a relatively small market so Twitter’s value likely has much to do with demand and a scarcity of sellers. In the real world, Twitter might be treated completely differently, particularly if it had to report financial results that would show little revenue and significant losses.
In many respects, Twitter reminds me of the initial dot-com boom in which investors completely ignored the financial fundamentals of companies with lots of users. Right now, Twitter is a science project gone wild; it is not a business so the only way to provide it with a $4-billion valuation is its potential as a takeover target.
Hat tip to Mashable.
One Comment
Great post Mark! I especially like your last point. I haven't thought about that analogy, because it always seemed so (too?) obvious to me. But tbh, now that I read this, it strikes me to really just be that exact same mistake made a couple of years ago. Let me Buffer that
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