how is it that twitters takes in over 500million but loses 130 million net?

[prc117f]

How is this possible? how could they have so much expense that it costs 630 million to run this company?

colo servers cannot cost to much to run twitter, its not exactly a heavy duty web app. so where does all the money go that they actually lose 21 cents per share?

It looks to me like the money is squandered somehow.

 

[xandman]

I have never understood internet company income statements or revenue models. I don't think I ever will.

Though I fondly remember the year 2000, I think you have to be from the Bay Area to "Get it".

Trade Momentum.

 

[prc117f]

I have never understood internet company income statements or revenue models. I don't think I ever will.

Though I fondly remember the year 2000, I think you have to be from the Bay Area to "Get it".

Trade Momentum.

Yeah it all sounds like Hollywood math. I don't understand how any of it works. Taking in so much cash yet actually ending up in the red by 130 million.

 

[xandman]

Yep. They coined the term "burn rate". Essentially, income doesn't matter and they intend to "burn" through capital. Be it stockholder equity or debt. What matters is that companies grow fast enough and scale up. Their eventual dominance will ensure that fat returns to shareholders will be made. Given that returns are in stock appreciation rather than dividends, you have to stomach the valuations for the "future".

This was great when the internet was new and we didn't know the extent of change that would occur. However, it is already 2014. The biggest contribution of the internet is quick access to information and free porn for all.

So far, the oldest, biggest and most successful example of an internet business from that era is AMZN. Perhaps, Google which came a bit later. I think they still go with that model defying the business pundits. So, you can't say it doesn't work.

But that's retail and Twitter is, random brain farts with little mouth control. Kinda like us on ET.

 

[i960]

Apparently they need 4100 employees to keep twitter running - a large amount of which are probably working and living in SF directly. I'd probably start there.

 

[hajimow]

How is this possible? how could they have so much expense that it costs 630 million to run this company?

colo servers cannot cost to much to run twitter, its not exactly a heavy duty web app. so where does all the money go that they actually lose 21 cents per share?

It looks to me like the money is squandered somehow.

Did you include private jets and parties in your calculation?

 

[FCXoptions]

For last quarter looks like they spent a ton on R&D and selling expenses...like $440m :eek:

 

[loyek590]

ah, the Bay Area, man, it was beautiful before the internet

now a kid in Indiana or Chile can live just like a man in NYC.

talk about leveling a playing field

I'm not sure we know how to value things anymore. Some of us have seen times when dollars were not a very good measure.

 

[Zestilio]

So, what’s wrong with this? Nothing, if you don’t mind a sort of Wild West business ecosystem. The nice thing about big companies with substantive physical businesses is that you can collect taxes from them, regulate them, enforce employment laws, and do all the other things that go out the window in the “new economy.”

 

[loyek590]

So, what’s wrong with this? Nothing, if you don’t mind a sort of Wild West business ecosystem. The nice thing about big companies with substantive physical businesses is that you can collect taxes from them, regulate them, enforce employment laws, and do all the other things that go out the window in the “new economy.”

I was brought up on John Wayne movies, so I like the Wild West.

The funny things is, when He came on the scene, he was the only liberal communist cowboy who could tame the Wild West.

Now we remember him as the last free man who lived in the Wild West.