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]]>i think if you picture the $125 per person valuation as something like the expected value of earnings for each person into the indefinite future, than it might seem a bit more reasonable. so, grossly simplistically speaking (i’m not even going to bother to bust out a calculator), we could imagine a 25 year time horizon, with a discounted cash flow at whatever percentage, such that perhaps next year’s per person earnings is like ten or fifteen dollars, and at the end of 25 years that earnings is closer to zero… that might make the valuation seem more reasonable.

but even then, it’s not really all about the income to the company that generates the whole valuation. the valuation would be the expected gains passed on to the shareholders, along with alternatives available to those investors with capital to invest; of course, that has something to do with how much income each user is expected to generate, but that means that income is not the only thing. capital does, in a capitalistic system, need somewhere to go, and thus, valuation of a company will also be dependent on perception of risk in the marketplace held by the capital holders as a whole. capital holders as a rule are looking to maximize their return on capital; but, i take it as that can also mean that if in a certain economic climate the best that capital can do is zero or negative return, then capital is still trying to maximize gains, albiet in such condition that might mean minimizing loss.

anyway, curious to hear your further thoughts on the matter if you have the chance.

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