BRN 13.7% 29.0¢ brainchip holdings ltd

M2 and Present Value Cashflows of Tech sector

  1. 3,400 Posts.
    People, for those not understanding current market caps in the tech industry you firstly have to understand how this works:

    We have to understand that Technology stocks are about valuations based on future returns - linkedIN is one example Paypal is another - their market caps were well into the 100's of million and billions before they started making money - called (present value cashflows of a tech company Verses future cashflow models)
    Linkedin -their value exists far into the future before the cashflows actually exist

    In early 2014 LINKED-INS market cap was 24.5 Billion which is high for a company earnings of less than 1 billion in revenue and only 21 million in net income for 2012- seems mad right ? well maybe not brothers and sisters

    However you have to consider these prices are based on Linkedins future cashflow projections
    This is how the BIG tech companies operate - Google Apple and many others so if Brainchip is as ground breaking as we/company, say then we are certainly going to find out sooner rather than later so don't be surprised after milestone 2 and 3 and some Fortune 500 companies getting in on the action that we are sailing comfortably around $1.00 share

    Lets assume Brainchip develop a monopoly in coming years then the promise of years or even decades of profits from their monopoly will drive valuations far beyond current market cap because of BC power to innovate their hardware-and have it applied to most technologies - this is what Apple created with the IOS system that took them to dizzy heights
    Now if we go way back to one of Brainchip's earlier presentations they stated that they would become a high end profitable business - BINGO !!
    Take Paypal in 2001 they projected their future profits would be dollar X and their market cap agreed with this valuation methodology so if you think our market cap is too high now then wait until its 10 x current and you may be looking at todays price as the bargain of the century
    Cheers Schu
    Last edited by Schumacher: 19/10/15
 
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