Twitter BTW has 1.3 Billion in sales (Buisness Insider) so I dont understand the math here. By the way the term is highly leveraged by JP Morgan with (Elon Musk as the front man) who in the old days would invest money in real assetts such as Steel Mills and Railroads that put people to work and built America. Not this internet which is built on thin air.
roundstick3@gmail.comTwitter BTW has 1.3 Billion in sales (Buisness Insider) so I dont understand the math here. By the way the term is highly leveraged by JP Morgan with (Elon Musk as the front man) who in the old days would invest money in real assetts such as Steel Mills and Railroads that put people to work and built America. Not this internet which is built on thin air.
It is obvious - lying BS is valued higher than productive commerce.
Never too old to have a happy childhood!
roundstick3@gmail.comTwitter BTW has 1.3 Billion in sales (Buisness Insider) so I dont understand the math here
Here is the real low-down. Musk has built much of the value of Tesla by stroking the right people on twitter. Much of Tesla's value is determined by Musk's faithful following who believe he can do no wrong, So for him, control of twitter (and the ability to control how he is/is not censored) is where the value is.
He's also talking about offering a subscription service, which might actually build revenue, as well. But control of the medium is his real value
EuclidTwitter makes 85% of its revenue from advertising, which is not “thin air.” Now they are expanding into non-censored content. Demand there is surging.
Advertising is the thinnest of air. The hot air of outsized claimed benefits. By non-censored, do you mean outright bald faced LIES?
Fininacial theory tells us the current value of a stock is the present value of all future profits. So that tells us that the market thinks that certain Internet based firms are going to be more profitable than railroading. Now, whether that is based on solid analysis, the glamor of tech stocks, too much money sloshing around looking to buy a stock or the Musk fanboi effect is a question for somebody above my paygrade. I just have an MBA. But the railroads haven't been blazing new heights of profitability compared to other firms, so I wouldn't discount it.
So the current price of a value of stock is not based on physical assets or number of employees but physical earning power. If U.S. Railroads were run more competently and the general attitude of "well the train will get there whenever it gets there" was abandoned by railroad management in favor of a mantra more customer oriented. The market value of railroad stocks would price in potential of the rail portion of the U.S. frieght market increasing above it's 28-30% (it used to be 36% when I was younger). Instead of pricing in a future decline and categorizing railroads as a stagnant cash cow.
I think currently the railroad industry makes a lot of flat out assumptions that are just incorrect and narrows it's potential market share more. It is very sad we have basically two land based modes of travel for freight in this country and the least efficient in cost of transportation is winning the competition.
Now in the case of tech stocks, future earning power is more of an educated guess that it would be with a rust belt industry like railroading. It is much more difficult to guess where the world will be 10 years technically than it is to guess what our infrastructure or logistics needs will be in 10 years. So as a result tech stocks have a wider range of valuation they can spread over compared to railroads.
Part of Twitters price in my view is also reflective of a political movement in this country to limit First Amendment rights and only allow speech that is approved to a specific conformance by a small group of people. So there is a political dimension to part of the valuation in my view as well. If everyone embraced the philosophy that controversial speech should be taken on via more discussion of specific topics vs limited discussion of specific topics. Twitters price would be a lot less.
BaltACD Euclid Twitter makes 85% of its revenue from advertising, which is not “thin air.” Now they are expanding into non-censored content. Demand there is surging. Advertising is the thinnest of air. The hot air of outsized claimed benefits. By non-censored, do you mean outright bald faced LIES?
Euclid Twitter makes 85% of its revenue from advertising, which is not “thin air.” Now they are expanding into non-censored content. Demand there is surging.
By non-censored, I mean letting all sides speak, and letting the information consumer decided what to believe. They will decide whether information is lies.
As of the market close on 04/29/22:
UP Market Cap was $147.1 billion
CSX Market Cap was $74.7 billion
NS Market Cap was $66.9 billion
CN Market Cap was $81.6 billion
CP Market Cap was $68.2 billion
Since the commercialization of the Internet architecture, and the rise and fall in the dot-com bubble, the principal insider's question is how you monetize once you have developed a 'loyal clientele'. A very well-detailed example is the post-2018 plans promulgated by Kalmbach to exploit our 'community' up, down, and sideways with as many marketers as possible (as usual for the segment, with no benefits for us) -- there are now ads on the MR forum in between the threads, just like Yahoo Groups /neo/ as it started circling the drain, perhaps as a trial run for the other railroad fora...
The first of the scams involves perceived value of market cap -- the metric is 'take rate' with the implied promise that some kind of monetized content can eventually be served to all the eyeballs, raving fans, etc. on the platform.
The second scam involves the greater-fool theory: the idea that 'if we can own the space' (a line I have repeatedly seen, and that I understand as the big red flag it is) then I can pump my stock to people who don't ask the right questions about when and where the burn stops and the monetization, ideally the usual misinterpretation of BCG cash-cow revenue streaming, takes hold.
Hence you regularly see these firms, with no real distinctive IP protection to speak of, usually with structural burn extending out many quarters, selling for some ridiculous multiple... for a while. The current hype over unrestricted spaces on Twitter is one such. As anyone knows who has ever criticized Amway or one of the cognate MLM companies -- or the activities of the Church of Scientology -- the idea that "free discussions" get you to truth of some kind is laughable. But it doesn't stop people from claiming their platform will be different this time. There are reasons effective and attentive moderation is important, just as Wibberley-style perversion of moderation is dreadful, and I can almost predict what the Twitter innovation will wind up being.
At this point we get to another useful set of scams. Much Internet 'advertising' consists of serving ads, rather than ensuring the ads are read -- this is the scheme used by many of those sites that tease you into clicking 'next' through page after page of garbage ads... many of which you never scroll to or would click on (except accidentally) in a thousand years, but which can be charted as having been served to your IP address, and billed for.
Then there are the sites that induce you or confuse you into clicking -- these are particularly rife in the computer enthusiast community, for example on some "legacy driver provision" sites. Ambush ads, deceitful 'click here' buttons all over the page while the actual download is four-point isoluminant text... those damn jumping bottom ads Kalmbach has inflicted that jam the browser while they load, then cover the available text window while you're typing to induce a click...
Of course there is advertising that 'works' -- and I applaud coders who develop it -- you see ads that interest you and can reject those that don't; your choices are fairly shared rather than sold as lists; you can see and edit the 'preferences' that an algorithm has built for you, or at least ensure that they will be edited upon proper notice, etc. If you are already laughing... so was I.
You realize that Eustace Tilley is never wrong about these things?
https://www.newyorker.com/news/q-and-a/why-elon-musk-bought-twitter?
But perhaps more to the point, just look around you at all the Rhodes Scholars with their noses welded to the display of their "smart" phones.
If you need someones attention for your own financial well being, the angle is pretty obvious.
What gets me is that people are applauding that one man now has control over a major medium..Actually one man and JP Morgan Bank. The ghost of JP Morgan is smilng The gilded age of robber barons is back!
And you have no problem with Lex Luthor (Aka Jeff Bezos) who has owned the Washington Post for years? You speak out now? Excuse my skepticism
kgbw49 UP Market Cap was $147.1 billion
That looks to be a bit more than $44 billion. (h/t to kgbw49 for the posting)
The $44 billion valuation does seem to be a return of the dot-com insanity. IIRC, the bluebird's revenue was on the order of $1.8b, so P/R is something like 24 vs a typical P/E ratio of 15 for an established company. While Musk is a pretty sharp guy, I question whether he can grow Twitter's revenues by the factor of three or more to make the valuation anywwhere near to being sane.
"So the current price of a value of stock is not based on physical assets or number of employees but physical earning power."
Kerrecto! The only time the value of the physical assets comes in is if you violate “the going firm assumption” and think the firm is going to fold up and liquidate. As for the employees
roundstick3@gmail.com What gets me is that people are applauding that one man now has control over a major medium..Actually one man and JP Morgan Bank. The ghost of JP Morgan is smilng The gilded age of robber barons is back!
It's not relevant to what is discussed in the public square unless there are no other competing outlets and one man owns every media outlet........soooooo.......one mans ownership is not relevant to any discussion as it concerns to twitter.
BTW, Washington Post long before Bezos was owned by one family if I remember correctly for 80 years prior to Bezos. Nobody complained back then. So again irrelevant who owns the Post. Just some politicians of late want to make it an issue.
Just one thought for the input hopper. Not pro-or-anti Musk.
I have always looked at Twitter as texting on steroids.
You can attach pictures and videos, just like with a text, and depending on how many people sign up to read your tweets, it goes out to the masses without you having to pick the recipients as you would with a text.
Unlike Facebook, where people linger on pages longer so you can put an advertising banner on pages and generate revenue that way, with a tweet or a text there is very short interaction so it is difficult to add advertising banners to tweets or texts.
With texts, the cellular providers have monetized it by making it a fee for use. Granted, they may bundle it and not outline it as a separate line item on your monthly bill, but you are paying for texting service in your monthly payment.
I have long thought that the only way Twitter was going to be able to monetize their software would be to charge a monthly fee for it, similar to texting. Subscribers to Twitter could be charged, say, a dollar per month, or two, or five or ten.
If I recall correctly, there are 300 million +/- Twitter subscribers.
if they all were charged, say, $5 per month (about the price of a Grande Mocha at Starbucks) as a fee for service, suddenly that is $450 million per month in revenue or $5.4 billion in revenue per year, considerably more than the $1.0-$1.2 billion in revenue that they currently pull in.
Suddenly their profit picture changes. Even if they lose half their subscribers, the profit picture is still changed.
Again, just a thought for rumination and discussion.
Original post, Gee wiz, do little research first. BNSF sold for what $38 or $39B a few years back.
It's about emotions and perceptions. People are paying millions for NFT's for cryin' out loud. The internet is it's own universe, and titter....er, twitter....snapchat, instagram, tiktok, they're the galaxies. People would rather forego brushing their teeth and showering, even eating, than to miss an 'important' or juicy clash between two parties on social media, especially the 'big boys.' Money still brays.
selector It's about emotions and perceptions. People are paying millions for NFT's for cryin' out loud. The internet is it's own universe, and titter....er, twitter....snapchat, instagram, tiktok, they're the galaxies. People would rather forego brushing their teeth and showering, even eating, than to miss an 'important' or juicy clash between two parties on social media, especially the 'big boys.' Money still brays.
Twitter is not even on any "buy" recommendation lists at this point in time that I subscribe to. Tech stocks have take a major dive recently, I am down more than $300k. Doesn't mean I will sell on what is largely an emotion driven crash in some of the stocks I own. Twillo, Shopify, Square are good buys right now and have fallen too low, in my view. They might fall some more but they are all worth hundreds of dollars a share based on expected earnings growth. Shopify has the potential to reach Amazons valuation.
Erik_Mag,
+1 on the return to dot.com insanity on Twitter valuation. The stock had even been in the $70s at one point before losing over half its value.
Mr. Musk is paying a premium on the current market value but well below the former highs of the stock.
Long term a company has to make money somehow.
The Twitter revenue model likely needs to change. I would suspect - just a guess - that Mr. Musk probably already has a plan to make that happen.
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