Saturday, February 22, 2014

The Stupidity Barometer


Subtitle: The Financial Stupidity Barometer

In my short lifetime I have seen some financial busts.   Many of them have been preceded by some pretty wacko Financial behaviour.

Now if we leave the Elephant in the Room (Quantitative Easing) aside for the moment since I've already commented on this,  I can recall about 17 years ago the pre crash stupidity index that was demonstrated to me in

Paintings
Vintage Cars

In recent years though I am not sure if I can top the stupidity over-valuation index with the purchase of WhatsApp by Facebook for 19 Billion US dollars.

Facebook is a company valued at about 100 Billion USD   (I mean 100,000 Million Dollars, using the US Billion definition)  which provides a free Social Networking services:

Buying  for [reportedly] 19,000 Million USD  (19 Billlion USD)  a company  WhatsApp:


  • Provides a free Cross Platform Instant Messaging Application
  • Sends messages/ text/ pictures to other WhatsApp users via the Internet
  • 55 Employees
  • 4 year old company with 420 million users
  • Daily volumes of about 20 billion messages sent and 30 billion received
  • WhatsApp is bigger than its' rvials like Viber
  • Sale is 4Billion USD cash and remainder Facebook Stock
  • Facebook reportedly did it to gain user base and to remove WhatsApp competition.


The list of companies valued less than WhatsApp
includes American Airlines, Hertz and Ralph Lauren ..(follow the link)

Not yet worth 19Billion


Oh, it certainly is a Brave New World out there.


Friends:Joey- Sup


Links
Classic Car Pricing
Facebook Buys out the Competition
Koum WhatsApp's Founder in the Billionaire Club

Was FaceBook Cool or FOOL?
Was Google Planning to Outbid Facebook
Wikipedia WhatsApp
Still waiting to become 19Billion