A cool change is on the horizon for Facebook
Despite years of continued market growth, Facebook’s recent updates might finally signal there’s trouble in tech paradise, writes inkl’s Gautam Mishra.
One of the defining characteristics of early-stage companies (particularly of highly scalable tech companies) is that their share prices and market value grow far more rapidly than the actual underlying earnings do.
This is of course in recognition of the companies’ growth and future earnings potential. Eventually, however, all companies get to a point where investor sentiment cools off, and even though the company continues to grow, its value in the market starts to lag that growth.
Facebook remains as addictive as ever but it’s so unsatisfying now: all the posts are from people you hardly know.
It’s ripe to be usurped by the next big thing and the investors will go MENTAL when the returns fall.