Re:Square files for IPO
by mikeyouse on Wednesday October 14, 2015 @04:48PM
(#10389386)
A share price reflects the future value of the company's profits, not the past value. If the investing public believes that a large infusion of cash from the IPO will help you achieve profitability, they'll gladly invest.
Look at a company like Amazon, their net income was stunningly negative for a very long time [1] -- it's barely positive today -- yet their market cap is north of $250B. There is plenty of room for companies making losses to go public if they have a realistic plan to make profits in the future.
Look at a company like Amazon, their net income was stunningly negative for a very long time [1] -- it's barely positive today -- yet their market cap is north of $250B. There is plenty of room for companies making losses to go public if they have a realistic plan to make profits in the future.
[1] - http://i.imgur.com/M9igHQK.png