London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
"Listen, I do understand there are various techniques for valuation"
Ok well I'm pleased you've cleared that up.
Of course... if DA was turning £000m's in profit every year this would not be valued at £35m ...
Without pulling it completely out of context... the conversation stemmed from G.Rees saying and having said multiple times that TERN's investments are worthless based entirely on Profit / revs (this just isn't the case at all... you came in an defended this saying " fundamentally companies are valued on NPV (discounted future profits), other than profit how do you value a company?"
DA could be worth multiples of the current mcap and that value will not be judged by profit but of course... as you say "Lets face it if the NPV on DA alone indicated significant positive NPV we would not be priced where we are now."
Yes it would be easier to value but that doesn't mean there isn't value.
G.Rees argument is entirely to discredit TERN no matter how he does this... I think you should be questioning his motives as his argument is complete junk and I would hazard a guess he already knows this.
So tell me... what's the NPV of a possible 20% market lead over AWS for MS in 5 years time in the IoT space?
Listen, I do understand there are various techniques for valuation but NPV is still the most reliable. Lets face it if the NPV on DA alone indicated significant positive NPV we would not be priced where we are now.
always makes me laugh when you see people on these forums valuing companies and then coming up with wild PE's
eg: "2m oz gold at 30k extraction a year gives us X and then add on a PE of 50.. we should be £5" current share price 4p lol
You can expect higher PE valuations from companies in safe jurisdictions, does it hold intellectual property, can it be easily copied, how secure is the company, what market its in & what kinds of companies / businesses or technology is it dealing with.
If you compare this to G.Rees argument which is entirely financial based it is a junk argument as all of TERNs technology ticks these boxes despite, to date turning a large profit.
I don't think DA is worth the $5b that the trippers on ADVFN think but that is not to say it isnt worth multiples of the current market cap. I would be more surprised if it wasn't Microsoft wouldn't give it the webinar publicity it has already have if it was as he says "worthless".
"Not really, fundamentally companies are valued on NPV (discounted future profits), other than profit how do you value a company?"
Potential profit based upon different profit models - contract vs SAAS vs white labelling. Market defining tech commanding a premium. Bids between buyers for competitive advantage. Patents. Symbiosis and therefore improvement with/of own tech. Desirability of product to own existing client base (are Azure users taking up KS?). Goodwill.
In other words there are a number of reasons why a prospective buyout candidate might be attractive to a buyer, and if the tech may provide competitive advantage, then a bidding war could break out. Value depends on a range of factors and drivers. Hopelessly naïve to say just NPV.
We're not talking about a corner shop being for sale here. With a fixed annual, predictable income and no other benefits.
Gekkonls out of interest. Why do you believe some companies have far higher PE ratios than others ?
Companies are valued in lots of ways, seems you and g.Rees are 2 that only look at profit.
For example a company running a small profit but that was scalable would be valued much higher.
Likewise a company that was versatile & could be moved would demand a higher valuation.
Or indeed..
A company that had never made a profit but had ip which was needed EVEN if that ip was not profitable, would carry value.
DA is seemingly a good use arsed for that last point, it’s used, it’s needed and regarded highly from Microsoft, but never made a profit.. it holds value because of its usage & use cases... absolutely nothing to do with the financials.
Not really, fundamentally companies are valued on NPV (discounted future profits), other than profit how do you value a company?
It’s such a junk argument. Tech companies can be sold for ludicrous sums having never spun a profit & yet your argument is based on exactly the opposite.
You have to go on filter as your stupidity will just frustrate me.
It’s not the point & you know it. There are far more to companies valuations than profit. Far more.
Out of interest - what reason would you give for being so he’ll bent on TERN being worth zero when there’s so much junk on the market?
Is it... you’re such a nice chap you go out of your way for completely selfless reasons ?
Haha yeah righto.
Have only just published their Accounts..
How many users did wattsapp have?
How many users does keyscaler/COVID app have?
One companies product was being utilised over 8 billion times a day with 450 million users... Guess which company??