Your English writing platform
Discover LudwigSuggestions(5)
Exact(14)
An alternative reason is put forward by the head of a leading investment bank (not the underwriter), who contends that the current high valuation for exchanges is no different from the current high valuation for top-tier New York apartments.
At this price, Renren is valued at $5 billion, a high valuation for a company with 2010 revenue of only $76.5 million and operating income of $17.3 million.
"This is a very high valuation for the U.S. company, so yes, this is a high price to pay," said Mats Nystrom, an analyst at SEB Enskilda Bank in Stockholm.
DealBook » With Lackluster Debut, Facebook Must Prove Itself to Investors | The lack of a bounce in Facebook's stock price on its first day might mean that investors are not comfortable with the high valuation for the social media site.
Often investors hedge their bets and value several stocks on the basis that each might dominate the market, but this produces a valuation that, in aggregate, is bound to be wrong.The second problem is the assumption of rapid growth for a long period and then the use of a high valuation for earnings at the end of the growth cycle.
So how do you explain such a high valuation for such a small check?
Similar(46)
Exceedingly high valuations for social media companies might distort incentives for investors and technologists.
In early 2008, at a time of high valuations for many emerging Web companies, the Zagats tried and failed to sell their company, to the disappointment of some of the venture capitalists who had invested in Zagat in 2000.
Although the offering was evidently aimed at capturing some of the high valuations for Internet-related shares -- and at giving the company the ability to use stock options to compensate employees -- it was announced on a day when Internet stocks performed poorly.
Within a year Wall Street's high valuations for such lenders had collapsed.
Don't listen to market pundits fretting about high valuations for the major market averages.
More suggestions(3)
Write better and faster with AI suggestions while staying true to your unique style.
Since I tried Ludwig back in 2017, I have been constantly using it in both editing and translation. Ever since, I suggest it to my translators at ProSciEditing.

Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com