Share price is a function of revenues. Cash flow and profitability determine stock price.
This should usually be the case. But aside from the dot-com and social-media bubbles, there are cases where strong growth prospects may justify a share price premium, even with negative cash flows and in the absence of revenues. Valuable intellectual property (ex. patents on the next wonder drug with promising Phase 3 results) and other barriers to entry should make some companies worth more than others, all else being equal.
Groupon, of course, has extremely low barriers to entry.
Slashdot Mirror
Share price is a function of revenues. Cash flow and profitability determine stock price.
This should usually be the case. But aside from the dot-com and social-media bubbles, there are cases where strong growth prospects may justify a share price premium, even with negative cash flows and in the absence of revenues. Valuable intellectual property (ex. patents on the next wonder drug with promising Phase 3 results) and other barriers to entry should make some companies worth more than others, all else being equal. Groupon, of course, has extremely low barriers to entry.
The only way that any argument that software patents are stifling innovation can ever work is if you don't lie when you make an argument about them.
Why do lies mean these arguments don't work? Why do lies work so well in most other arguments?