Yeah... I've run & sold three of my own and I used to value businesses.
The valuation of start ups is definately a black art and not a science.
Using historical earnings with a multiple doesn't work as the earnings are usually negative.
Using a discounted cashflow is like trying to read a crystal ball to tell the future.
And using revenue multiples ... well that lead to the 2000 tech bubble that went pop in a big way. Facebook is a more recent example.
The reason I'm sitting on the fence is not that I want to "see how it goes a bit before I commit" but rather I want to run some comparisons with other locals - particularly wotif. I thought about Atlassian but with no public listing its dynamic were different. Oh and interestingly Wotif's original raising went almost entirely to shareholders selling down (ie was taken off the table) and not used for development.
I'll dig a bit and post some more thoughts in a couple of days.
Still - my point remains. Interesting to see the directors are currently sellers at $6.00.
XRO Price at posting:
$5.58 Sentiment: None Disclosure: Not Held
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