Fri, 16 Oct, page-47

For any more proof about my position, that markets are prone to excess, and often get it "wrong" have a quick glance at these 2 companies.

MLD vs DOU

On Friday, the market was assigning similar values to each company!!


One is a significant business: decades of history, thousands of employees, hundreds of millions in NTA, (NTA in excess of its share price even), almost 800 million in annual revenue, and 130 odd million in EBITDA.

The other company, listed a few weeks ago (at twice the IPO issue price), has virtually 0 revenue, makes no money, has no track record, has virtually 0 assets, a handful of staff, and all it has in a simple app, that may or may not gain traction, that may or may not ever make any money....It's a complete start up, with no moats, no history... and god knows what it will look like in a few years.

More profoundly, the "all knowing market" (lol) has changed the enterprise value of this startup, from 12 million A MERE 2 WEEKS AGO, to 200 million on Friday, yet nothing has really changed... what's a mere 18 odd times increase in EV in a few weeks??


No sorry, the market is not all knowing, frequently misprices companies, and is absolutely prone to the basic human emotions of greed and fear.

DOU is a great example of rampant speculative excess, and a great proxy for the fickle and imperfect nature of the markets price discovery process...