NYU Stern
Share / Print
Faculty News

Prof. Aswath Damodaran on Twitter's value

CNBC logo feat
Excerpt from CNBC -- "It's almost impossible to value the company as it stands right now, because you know so little about the company. In fact, all we know are the revenues it made over the last 12 months. So valuation is almost impossible. But the focus of my post, which I had on Twitter, was that when you can't value the company, you can price it, price it based on what other companies are trading at. So for instance, if you looked at Facebook and LinkedIn and you looked at the revenue multiple that those companies trade at, which is about seventeen-and-a-half times revenue, you come up with about 10 billion...simplistic, but that's pretty much what pricing is. You base it on very simple metrics and numbers that you already know."

Watch the video