Stocks are basically a percentage of ownership. The share price as a dollar amount is meaningless because it could be 1% of a company or 0.000000001%. The relevant number here is that Reddit is IPOing at a valuation of $5 billion (that stock buys a ¹⁄₁₅₀₀₀₀₀₀₀ interest), which all I can reply with is hahahahahahahaha
$6.5B valuation (assuming a standard 20x EPS model) should imply in the neighborhood of $325M/year in revenue from a company that makes about a third of that.
Either Reddit plans on tripling its revenues in the near future or this is an unrealistic target.
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0.031 sounds more realistic
It’s not quite that bad, the author buries this near the end:
Which if I read that correctly means he thinks a fair valuation of the stock is about 90 cents.
0.00000031 more like
Stocks are basically a percentage of ownership. The share price as a dollar amount is meaningless because it could be 1% of a company or 0.000000001%. The relevant number here is that Reddit is IPOing at a valuation of $5 billion (that stock buys a ¹⁄₁₅₀₀₀₀₀₀₀ interest), which all I can reply with is hahahahahahahaha
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Well, either two values give the third. All one’s gotta know is two of: valuation, price per share, number of shares.
$6.5B valuation (assuming a standard 20x EPS model) should imply in the neighborhood of $325M/year in revenue from a company that makes about a third of that.
Either Reddit plans on tripling its revenues in the near future or this is an unrealistic target.
Removed by mod