
The end is near: Henry Blodget's index of companies that don't make products and don't have revenues - raganwald
http://fakesteve.blogspot.com/2008/04/alley-insider-creates-bubble-20.html
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dpapathanasiou
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.

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parker
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.

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papersmith
And craigslist? Has he been living under a rock?

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dbreunig
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.

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ardit33
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.

~~~
dbreunig
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.

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neilc
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...

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andrewparker
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.

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mechanical_fish
_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.

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

