The dubious valuations Wall Street puts on companies is put on the fire by Jason Fried of Basecamp quite wonderfully over at Medium.com:

https://medium.com/@jasonfried/press-release-basecamp-valuation-tops-100-billion-after-bold-vc-investment-c221d8f86ad7#.cjbhopo0v

In order to determine the valuation of companies, Bhatnagar typically applies the following formula: [(Twitter followers x Facebook fans) + (# of employees x 1000)] x (total likes + daily page views) + (monthly burn rate x Google’s stock price)-squared and then doubles if it they’re mobile first or if the CEO has run a business into the ground before. Bhatnagar admits the math is mostly a guess but points out that “the press eats it up.”

Well done!

Date captured: 2015-12-02 12:14:00 -0600