Quote:
Originally Posted by notime
A friend of mine who sold his company to an other company noted on the stock exchange 8 years ago, he frequently visits my office just to chat, have coffee, talk about life, problems with kids/wife and do gossip and all. He once said this to me, and I recall it perfectly: "If you have a company doing 100M per year making 1M profit and you go public IPO, how can a company be worth a billion a day later, since they still doing the SAME 100M in revenue and making the SAME 1M in profit? Nobody could ever explain me that logic, I just can't grasp it but I was paid for it, don't ask me how but it happened."
He never mind the fact he got paid but he never really understood how that system worked and why it's there in the first place.
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I was involved with a few companies back in the dot com bubble that were on the verge of IPO... hell there was no end to them here in Silicon Valley back then, everyone was "the next big thing about to IPO".... some made it, some didn't. But shit, I remember those crazy dot com schemes and businesses spending money like I've never seen before, or since.
Insane spending. And it was all perfectly normal. Run out? Just hit the investors up for another check. The general vibe was, "after IPO we'll all be worth billions, so it doesn't matter".
Of course we know how that worked out.... lol
