The recent significant drop in Reddit’s valuation implies a fundamental flaw in their valuation strategy, particularly when it comes to assessing the value of a tech company. Tech companies often appear to be overvalued and face difficulties in sustaining their valuation growth once they’ve reached their peak.
Could you not argue that tech company valuation is disconnected from reality too; if the biggest modifier of its valuation is not based on revenue/profitability of the company but rather on the market in general?
The recent significant drop in Reddit’s valuation implies a fundamental flaw in their valuation strategy, particularly when it comes to assessing the value of a tech company. Tech companies often appear to be overvalued and face difficulties in sustaining their valuation growth once they’ve reached their peak.
The biggest modifier in a tech company’s valuation is the market, and despite the smoke and mirrors, the market is easily down 40%.
Anyone who has gone outside in the last 2 years knows this, but politicians so disconnected from reality still sing the song and dance.
Could you not argue that tech company valuation is disconnected from reality too; if the biggest modifier of its valuation is not based on revenue/profitability of the company but rather on the market in general?