This article clearly indicates that lack of profits in tech companies is by no means “lights out” as some are implying.
https://www.cnbc.com/2018/08/29/no-profits-no-problem-the-economy-has-a-growing-appetite-for-unprofitable-companies.html
Profitsare crucial to the growth of any company, but some of the biggest names inbusiness today have yet to make money.
Publicly-listedcompanies like electric carmaker Tesla and music streaming firm Spotify make billions in losses.
Likewise,ride-hailing firm Uber lost $4.5 billion last year, but is gearing up for a highly anticipated public listing that will likely take place next year.
Investorsare not put off by unprofitable companies. In fact, the proportion of companiesreporting losses before going public in the United States is at its highest since the dotcom boom in 2000.
Lastyear, 76 percent of the companies thatlisted were unprofitable in the year before their initial public offerings, according to data compiled by Jay Ritter, a professor at the University of Florida’s Warrington College of Business.
That’slower than the 81 percent recorded in 2000, but still far higher than thefour-decade average of 38 percent.
Therapid growth of the tech sector is one reason why investors are willing to puttheir money into unprofitable companies, since many shareholders value growthand tend to be more comfortable even if firms aren’t making huge margins.
Ritter’sdata showed that of the companies that went public last year, just 17 percentof tech companies were profitable compared with 43 percent of non-techcompanies.
Whatdo you think about the above JJ? Are you going to go and tell these companies theyare doing it wrong and about to go broke? Maybe you should hop on to the Uberchat forum and give them some advice on how to become successful.