On Wed, Nov 25, 2015 at 5:54 PM, Kiriki Delany <kiriki@streamguys.com> wrote:
[...]
Bottom line, is the industry needs to be increasing value, because the flip side.... working for no profit, surviving off investment only... there's no end-game. You see this cycle time and time again as market share is grabbed, then underperforming companies are rolled up. In this process value is destroyed.
Ultimately this is also why it's extremely damaging for investors to constantly invest in companies that don't make a profit, and don't provide a successful economical model for the services/products provided. These companies largely live on investor money, lose money, and in their wake destroy value for the entire industry. Of course the end-game for the investors is to make money... I'm always surprised how strong investment/gambles are for non-profitable companies. I guess there is no end to those with too much money that have to place that money somewhere. As the rich get richer, there will only be more dumb money cheapening the value proposition. After all, who needs value when you have willing investors.
I'm confused. If these companies largely live on investor money, lose money, and destroy value...how is it that a scant two sentences later, the rich are getting richer, and there is _more_ dumb money? I would posit the rich get richer because they *do* see value in the investments they make. That is, value is being created in these deals...just not for everyone. Matt