this genius invention saved my new year's eve

When that (the P/E ratio) is high, people choose not to buy the stock.

This is wrong. First, what is 'high' when earnings are growing rapidly? The pe for the current year may be 100x which is 'high' but if you look out one year it may be 50x, which is lower, and out two years even lower. all sophisticated investors understand that. They even have their own metric called a peg ration which is pe divided by growth. Secondly, there are a lot of young publicly traded tech companies that don't even have earnings and can't be measured on that basis. The revenue multiple is a pretty bad metric to look at because it ignores profitability, but it's all you have.

Also, there are many companies who have been highly valued but never worked out.

There are a lot of every type of company that don't work out. There are a ton of companies with really really low P/E ratios and low valuations that don't work out. They have really low valuations because they are bad businesses. I'm not singling Google one bit.

Also, Disney may want to buy Pixar at an inflated stock price compared to individual investors, because it matters to Disney on a whole different level. This happens all the time. When company A wants to buy the stock of company B, individuals buy B and sell A, because of the buyout not because of earnings.

Yes, and this is the cornerstone of VC investing today. You think the guys putting in money at $800mm for snapchat don't realize that the most likely exit is M&A? Almost all early stage investments end up being sold. It's a legit strategy albeit really risky (and highly rewarding)

Price is not an indicator of any one thing about a company. Individuals invest in a non-blue chip company because of what they can sell the stock for, not its earnings or potential. Just what someone else will pay for it whatever their reason.

I don't understand this at all. Price is indeed an indicator of one thing- the valuation of the business. Are you saying that people invest in a stock because the price per share seems 'right'? Like ooh I want to buy that stock because I can get a share for $4 and that sounds cheap?. The only ones doing that are truly scrubs and have almost no influence on the markets except maybe on the pink sheet stocks.

Thinking that stock price is a single indicator of a company's value, now or in the future, isn't what a lot of potential stock owners think when they consider the stock price.

laughable... So now investors don't think what will happen to the stock price if they buy? Haha. Even your buyers that are mostly looking for dividends are closely looking at the share price, because it will impact the dividend yield.

Also, snapchat's valuation is well-known? By well-understood, very large institutions? I think that's hyperbole.

Think again. Institutions focused on the tech space are obsessed with the next big thing and are absolutely insanely laser focused on who is getting what valuation, and they understand very well the investment thesis that supports that valuation. They don't have to agree with it, but they understand it.

also its I hate semantic nitpickers that add no value pointing out obvious typos. I apologize in advance for any typos above

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