The end is near: Henry Blodget's index of companies that don't make products and don't have revenues

http://fakesteve.blogspot.com/2008/04/alley-insider-creates-bubble-20.html

by raganwald • 18 years ago

38 11 18 years ago

fakesteve.blogspot.com

I think Henry did a pretty good job at explaining his methodology. He uses public and private comps for revenue multiples. Cites valuations in the case of private comps. It's certainly better than most of the random valuation speculations I read on Techcrunch.

raganwald• 18 years ago

better than most of the random valuation speculations I read on Techcrunch

By any chance do you mean:

http://en.wiktionary.org/wiki/damning_with_faint_praise

mechanical_fish• 18 years ago

It's certainly better than most of the random valuation speculations I read on Techcrunch.

Very, very debatable. A back-of-the-envelope estimate on Techcrunch only wastes your time once. This endless stream of eternally-updating back-of-the-envelope estimates threatens to waste your time over and over again, as Fake Steve laughingly points out.

The problem with these guesses is that they're dynamic, and the up-and-down movements in the guesses are essentially pure noise, which you are now being encouraged to inject directly into your brain. If tracking hourly movements of actual stock prices is a waste of time -- and it is -- than this is an even higher order of stupidity: It's a waste of a waste of time.

dpapathanasiou• 18 years ago

Priceless quotes:

"Because if there's any sure sign that the end is near, it's the fact that Henry Blodget is publishing an index with ridiculously high valuations"

"Is he not satisfied to have played a starring role in the greatest financial mess of our lifetime? Now he needs to do it again?"

"I'm told Henry Blodget is driven by a desire to redeem himself. If that's the case why doesn't he go do some kind of charitable work in the Third World instead of touting worthless stocks?"

Amen.

dbreunig2• 18 years ago

I like to imagine bankruptcy auctions; what would the listings look like if any of these companies went under?

The bulk of most would be hardware and shwag. And that's not comforting.

ardit33• 18 years ago

it will be awesome. Another weeding out of companies that provide not much value. A lot of them, should really be just few guys working form their apartments, getting some revenue back ala Craigslist, and not these big companies, with offices, with lot's of expenses, and "hyped" evaluations. The ecosystem might not support this large companies, and once they burn their vc funding a lot of them will be gone, or just be a lot lot smaller than today, to match what they actually are earning.

Just like earth's mass extinsions, where 60%-80% of the animals died, and new ones came up and flourished, bringing us humans to light.

dbreunig2• 18 years ago

Maybe that's the next big change: the acceptance of apartment working. If it was legitimate to work at home/have shared spaces, you might see a lot more startups that take their time, are in it for the long haul, and (perhaps) more focus on better products.

parker• 18 years ago

I know that you could make a decent argument that some of these companies make no revenues, but he's way off base on some of them. Betfair, for instance, had 2007 revenue of ~$300 Million. And Kayak has a great revenue stream.

I'm an admitted skeptic sometimes, but seriously, do some research before spouting hyperbole.

papersmith• 18 years ago

And craigslist? Has he been living under a rock?

dhimes• 18 years ago

Dang. Didn't make the list. Gotta keep workin'...

neilc• 18 years ago

The best part is how the index updates in "real time" as the NASDAQ changes.

BTW, did anyone notice that the SAI25 "advisory board" features VCs who happen to be investors in many of the companies that are so generously valued:

http://www.alleyinsider.com/sai_25_advisory_board

Conflict of interest? How Web 1.0 of them...

The end is near: Henry Blodget's index of companies that don't make products and don't have revenues

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