Carvana, the self-titled Amazon of used cars, has become a magnet for growth investors and short-sellers alike while growing rapidly. With its recent rise in the minds of consumers nationwide, good reviews, rapid revenue growth, and progress towards GAAP profitability, it would seem that it is making headway on consolidating the used car market.
Netflix: This Isn't the Platform You're Looking For
Since 2009 there has been proliferation of VC-funded unicorns in a variety of tech sectors, and the bubble has been blown on the hopes of finding the quintessential dual-sided platform which will monopolize either the search for or distribution of a certain product (or both). As public investors are learning from the recent offering of Uber however, not all “tech” companies and platforms are created equal.
The Assumptions Built into Stock Prices- Netflix & Amazon
This should be a short piece, but I wanted to use a few examples to describe the assumptions inherent in stock prices and why investors need to think through stock valuations. Given that price is a major factor in predicting future returns, investors should of course be unwilling to pay anything greater than the present value of all future free cash flows, discounted at an appropriate rate for any investment.