Valuations – Tech Narratives

There are two things here: firstly, Tesla’s Q1 delivery number, and secondly what’s happened to its share price since it was announced. Stock valuations are interesting, but far from definitive as indications of what companies are worth or who’s “winning” in any meaningful sense. Tesla’s stock price is all about trajectory, and an unusual (perhaps even unwarranted) amount of investor confidence and enthusiasm that the company which is currently very small and unprofitable compared to its legacy peers will quickly catch up on both fronts. That, in turn, requires believing in Tesla’s manufacturing projections, which require a massive increase in its growth rate, from 56% annual growth in the past year to something much faster to hit its 500k target for 2018, which would be a six-fold increase over its 2016 numbers. Long-term, it seems very likely Tesla will reach that kind of scale, but given its track record, there’s every reason to believe it will hit this and other related targets later than it has projected. On that basis, then, the valuation seems that much less justifiable on the basis of any near-to-medium-term results.

via Recode

Tech Disrupts Transportation

Snapchat Parent Snap Inc. Sets Valuation at $19.5 Billion to $22.2 Billion as IPO Approaches – WSJ (Feb 16, 2017)

It’s hard to avoid the sense that this valuation coming in at the low end of the previous target range is a sign of dampening excitement in the Snap IPO following the release of the S-1 and other worrying signs. That’s a sign of a certain amount of humility and realism from the company, which is a good thing. It’s still a massive valuation for a company at Snap’s stage of maturity, and it’s always possible the valuation will come down still further (or go up) following the roadshow, as investors get to kick the tires a little more. I’m more curious than ever what happens when the IPO finally kicks off because – as I wrote the other day – Snap is debuting at a terrible time in its history.

via WSJ

Snap

Snapchat is Maturing

Snap’s IPO Roadshow Message: We’re the Next Facebook, Not the Next Twitter – WSJ (Dec 29, 2016)

One of the most interesting questions Snap has to answer as it approaches a possible IPO is which company will serve as a better benchmark for its potential – Twitter or Facebook. Part of making the pitch for the latter is demonstrating that Snap is more than just a messaging app, which means focusing on its content offerings and partnerships and the potential ad revenue they might drive. Snap’s recent rebranding and launch of Spectacles are all part of a significant evolution of the company and its identity.

via Snap’s IPO Roadshow Message: We’re the Next Facebook, Not the Next Twitter – WSJ

Snap

Snapchat is Maturing

Lessons From Fitbit’s Troubled Revenue Multiple – Mattermark (Dec 28, 2016)

The concluding line of Alex’s piece is “hardware is hard”, and that’s certainly becoming something of a narrative in its own right. But this is also a story about increasing market skepticism about wearables companies, and their potential to grow and generate profits. Fitbit has been the exception as an independent wearables-focused vendor, but I and others have questions about its ability to sustain its growth and profitability going forward.

via Lessons From Fitbit’s Troubled Revenue Multiple – Mattermark

Fitbit