I kept wondering what would be the pets.com of this second bubble. I wonder no more
WeWork is an outlier case since Softbank caused the problem by giving them all this money but will probably keep them afloat as well.
I don't follow the premise.
Amazon became so valuable because of AWS, not because of their retail operations. Its hyper low margin retail division might be worth $120-$150 billion in a sane market. It's considerably smaller and less profitable than Walmart for example. It's not trivial of course, however they'd still be a lot smaller than the other titans of market cap. More like Costco, less like Microsoft. And at this point their retail segment is slow growth, so the stock would probably be under compression duress about now, the bloom would be off the valuation rose.
Amazon's recent market value ramp begins when they start showing off the growth and profit potential of AWS. In the first part of 2015 they showed off the figures, the stock promptly skyrocketed four fold in three years afterward (it was previously on a slow, quite gradual climb and had not gone net higher in about 1 1/2 years).
I’m not saying AWS is worth Amazon’s current market cap minus $375B. Could have both segments being valued less by the market as one combined company. It’s just I have a hard time seeing Amazon worth around $150B in late 2014, which def includes some of AWS pre-publicly being reported in earnings, not being worth around triple that amt now with the way stocks have gone. Assuming AWS was valued at $20 in 2014.
For the growth, their retail growth has slowed. Under 20% a year now. But their growth in subscription (Prime mostly) and advertising are still growing at above 1/3. Like AWS. So the company wouldn’t have nothing for the stock to be speculatively high on without AWS.
Worth remembering Amazon invested in pets.com though...
This actually sounds exactly like the current tech unicorn overvaluation party we find ourselves in.
The gig economy startup scene was much much bigger. But it also didn’t completely die out. Airbnb is wildly successful. Apps like Taskrabbit have survived. Handy was surviving. Probably a number more that survived outside the big names.
Airbnb is successful but is it sustainable? That’s the question we need to be asking of the Uber generation.
Their marketing is largely the reason in that article. Their growth has slowed so that makes sense. Airbnb has been slightly profitable before. And unlike Dropbox who have been in the same position, they don’t have the same competition level.
Article also says they still have $3B in cash and a $1B credit line which is a good sign vs total raised amt.
Surely ‘Oh shit, point to point delivery for small items in a large built up urban area is actually really difficult and expensive’ is the Webvan equivalent?
They raised $110.5 million in private capital and $82.5 million at IPO [0].
WeWork has raised $14.2 billion in capital to date[1].
In other words, pets.com only raised a mere 1% of the current total that WeWork has raised.
If pets.com was the poster child for the dot com debacles then this new era of irrational startup exuberance exemplified by WeWork is another beast entirely.
[0] https://www.marketwatch.com/story/sock-puppet-kills-petscom [1] https://craft.co/wework/funding-rounds
That doesn't sound like the right amount of inflation. Maybe you mean $190M then or ~$435M now?
2% compounded for 20 years is about 50%. In fact, that seems to be very close to the correct amount.
Should I take this opportunity to point out that pet.com's $435 million is still a paltry sum compared to WeWork's $14.2 billion in capital, or has that larger point been rendered moot by my lack of common sense?
Here's an article listing some of the failures from the late 90s:
https://www.complex.com/pop-culture/2012/06/stock-crash-the-...
Looks like eToys was close to $8B valuation around the time of its IPO. Although that doesn't mean they raised anywhere near that.
https://www.wsj.com/articles/SB927219879724795777
So, WeWork may have gotten 100x more investment, but its valuation is more like double or less.