Like instagram, the value of twitter is not (per se) in its cash flow, but in its strategic function as a competitor to other media outlets (eg newspapers) and as a complement to others (eg, live TV commenting system). This makes the market value and the (true) cash-flow value perhaps non-reconcillable, in accounting terms.
Instagram was worth $1B to FB (without any cash flow), because it could easily destroy 5x-10x that amount from FB's IPO valuation. A model for "valuation" is good CYA but nobody "needs" it when you are playing with orders of magnitude ROI. Just something to think about, when looking at valuation scenarios from Academics.
Instagram was worth $1B to FB (without any cash flow), because it could easily destroy 5x-10x that amount from FB's IPO valuation. A model for "valuation" is good CYA but nobody "needs" it when you are playing with orders of magnitude ROI. Just something to think about, when looking at valuation scenarios from Academics.