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charlesarthur : valuation   2

Disney put more than $400m into Vice Media. Now it says that investment is worthless • Vox
Peter Kafka:
<p>Disney’s accounting decision is yet another example — perhaps the most stunning one — of the turnabout we’ve seen in digital media over the past few years. Investors have decided that high-flying publishers that once confidently explained that they’d created a new media paradigm are now worth very little ... or even less.

Here’s a partial roll call familiar to some of you:

• Mic, which raised more than $60m, sold for less than $5m late last year<br />• Mashable, which was valued at about $250m in 2016, sold for less than $50m in 2017<br />• The properties formerly known as Gawker Media, plus the Onion and other sites, just sold for a price that’s likely well below $50m; Univision, the TV conglomerate which sold them off, had paid $135m for the Gawker sites alone in 2016<br />• We don’t (yet) know the value that Comcast, which put a collective $600m into Vox Media (which owns this site) and BuzzFeed over the past few years now thinks those two publishers are worth. But it’s a reasonable bet that Comcast thinks they are worth less than it thought in 2015.

All of those companies have different stories and different particulars. The through-line is that a few years ago, all of them were confident that they were going to shoot up in value, because they knew how to reach young audiences by exploiting the big tech platforms — in particular, Facebook and Google.

Instead, Facebook and Google have hoovered up the majority of digital ad revenue — the money the new publishers expected to get, once they reached scale. And publishers that had expected Facebook and Google to rely on them for content have learned that Facebook and Google don’t really need them, after all.</p>

The valuations were always wild, based on starry-eyed guesses from early growth rather than realism. So it goes.
Media  valuation 
may 2019 by charlesarthur
Time to rethink Xiaomi’s value • The Information
Shai Oster:
<p>Given that Xiaomi doesn’t release its earnings, it’s arguably better to use revenue multiples instead of earnings as a tool to compare Xiaomi to other manufacturers. In addition, Xiaomi splits profits with hardware manufacturers. (Xiaomi argues that all of these devices contribute to creating a bigger user base to deliver internet services that will have recurring revenue, such as entertainment on television, money market funds and even loans.)

Consider Xiaomi as a hybrid between Apple and Philips, given a little optimism on growth rates for phone sales in India and the fast growth of its appliance sales back in China. This year, phone sales are on track to hit 60 million at an average selling price of $175, according to Canalys. That’s around $10.5 billion in sales. Consolidating revenue from televisions and other hardware could bring revenue to about $13.5 billion. One investor suggests that Xiaomi can be seen as two-thirds Apple, trading at about 2.6 times revenue, and one-third Philips, which last year traded at two times its revenue. Add extra juice for the high growth rates and it could be valued at three times revenue, or $40.5bn.

That’s an optimistic look and still below what it was rated at two years ago. Investors say Xiaomi doesn’t publicly talk about profitability, but executives have said the phone production business maintains an operating profit. Xiaomi has long claimed that the real profits will come from the sale of services to its growing user base, but says it has only started monetizing that base last year through advertising, games and other transactions.</p>

That's only a little down from the $46bn that's offered higher up in the story, and ignores the fact that Xiaomi's phone sales are slowing down dramatically (down 14% on 2015 so far this year). If it can't grow its user base, it's stuck.
xiaomi  valuation 
november 2016 by charlesarthur

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