My thoughts on the Freelancer IPO: 400million valuation on $500,000 profit

By my rough calculations, is floating at a PE of 800.  That’s some serious potential earning the market is factoring in, given the ASX has a rough PE of 10-12.  That is, it would take your average ASX listed company 10 – 12 years for a company to earn back it’s worth. Freelancer, on it’s current profit, 800 years. But obviously the market is factoring in it being at the very bottom of a hockey stick shaped revenue growth curve. Even making a profit for some very large tech start ups is a long way off. Hell, Amazon and Twitter are still losing money.

I’m very interested in start-ups, as we are one, and especially in Australian start ups. I love that Freelancer is going public with such a massive valuation, and I hope there are more of these.  But for every Freelancer or Kogan, there are hundreds of unfunded or underfunded Australian start-ups that won’t get the attention they would if they were based over in US. My personal hope is that this successful IPO can spur more investment and interest in Aussie start ups.

BY : Edward | CATEGORY : business |CATEGORY SLUG: business | Date : 3 November, 2013 | Tags :