Big companies do this on purpose. They want their earnings and their expenses to match up as close as possible, because companies don’t pay any taxes on money spent on making money, only on profits. So if a giant company is in the red, the vast majority of operating expenses are tax deductible
I’ve worked for two successful startups and they also tried really hard to break even every year, for the reason you’re mentioned. The thing their investors wanted to see was revenue growth, not profits. As revenue grew they would hire more people to use up the money.
You generally don’t want losses as a business. Even a startup. Ever. You want your revenue and expenses to be as close as possible,ESPECIALLY for the first few years.
Some insane Silicon Valley companies take VC money and operate at a massive, massive loss, banking on making that up with a spike in growth later. In most cases, it’s built into their business model that they’d be operating at a loss for X quarters.
That’s not what’s happening here. They’re operating at a huge, huge loss, and they have no realistic business prospects for how to close that gap, ever.
Additionally, the market leader in their space (Twitter/X), is making a hard right pivot and becoming a right wing platform/safehaven. This is further reducing an already thin market share they might have claimed.
Purely as a business investment, if I saw these numbers, in this market condition, I would pull my money immediately. Halt all further investment. Call a board meeting. Liquidate the company to try and pay off the debts, and any proceeds are returned to the shareholders.
I would, under no circumstances, continue to invest in a company like that, expecting any sort of return on my investment. I could only expect to lose whatever else I put in.
There’s a world of difference between not having any profit because you’re aggressively reinvesting it into your business, and not having any profit because you spent 16 million to keep the lights on for a service that brought in approximately 5% of what you spent.
If you revenue grows 100% YoY and you are investing in growth, sure. I work for a 15 year old company that is just starting to become profitable, still growing well into double digits.
I always question “active users”, too. A few years ago I worked for a large cable company. We put out an app for them that let users email, text and make VoIP calls. Absolutely nobody in the real world used it but the company was able to make it look like it had well over a million daily users. They offered a discount on people’s cable bills if they installed the app so a lot of people did, and then the app would ping the servers once a day and this would be logged as an “active daily user.” So the million daily users was just customers who hadn’t bothered to uninstall the fucking thing. The company veeps behind the app knew it was total bullshit, but they were just trying to justify the expense of producing the app to the higher-ups.
It’s depressing to think that I spent eight years of my career writing exactly this type of useless bullshit cable company flagship app, for many different cable companies and ISPs. At least the final year was just doing literally nothing all day while “working” from home until I was finally laid off.
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Big companies do this on purpose. They want their earnings and their expenses to match up as close as possible, because companies don’t pay any taxes on money spent on making money, only on profits. So if a giant company is in the red, the vast majority of operating expenses are tax deductible
I’ve worked for two successful startups and they also tried really hard to break even every year, for the reason you’re mentioned. The thing their investors wanted to see was revenue growth, not profits. As revenue grew they would hire more people to use up the money.
deleted by creator
You generally don’t want losses as a business. Even a startup. Ever. You want your revenue and expenses to be as close as possible,ESPECIALLY for the first few years.
Some insane Silicon Valley companies take VC money and operate at a massive, massive loss, banking on making that up with a spike in growth later. In most cases, it’s built into their business model that they’d be operating at a loss for X quarters.
That’s not what’s happening here. They’re operating at a huge, huge loss, and they have no realistic business prospects for how to close that gap, ever.
Additionally, the market leader in their space (Twitter/X), is making a hard right pivot and becoming a right wing platform/safehaven. This is further reducing an already thin market share they might have claimed.
Purely as a business investment, if I saw these numbers, in this market condition, I would pull my money immediately. Halt all further investment. Call a board meeting. Liquidate the company to try and pay off the debts, and any proceeds are returned to the shareholders.
I would, under no circumstances, continue to invest in a company like that, expecting any sort of return on my investment. I could only expect to lose whatever else I put in.
There’s a world of difference between not having any profit because you’re aggressively reinvesting it into your business, and not having any profit because you spent 16 million to keep the lights on for a service that brought in approximately 5% of what you spent.
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Necromancer being wrong as always.
Especially if they’re a Twitter ripoff with one single user being the only one anyone cares about in terms of who posts.
In fact, I’m going to make a, what I feel is pretty safe, prediction that Truth Social also won’t make a profit over their last few years.
If you revenue grows 100% YoY and you are investing in growth, sure. I work for a 15 year old company that is just starting to become profitable, still growing well into double digits.
None of that is true here.
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600k active users and shrinking. That’s the problem. No growth perspective, no plans, just grift. Let alone how many of those are bots.
I always question “active users”, too. A few years ago I worked for a large cable company. We put out an app for them that let users email, text and make VoIP calls. Absolutely nobody in the real world used it but the company was able to make it look like it had well over a million daily users. They offered a discount on people’s cable bills if they installed the app so a lot of people did, and then the app would ping the servers once a day and this would be logged as an “active daily user.” So the million daily users was just customers who hadn’t bothered to uninstall the fucking thing. The company veeps behind the app knew it was total bullshit, but they were just trying to justify the expense of producing the app to the higher-ups.
It’s depressing to think that I spent eight years of my career writing exactly this type of useless bullshit cable company flagship app, for many different cable companies and ISPs. At least the final year was just doing literally nothing all day while “working” from home until I was finally laid off.
You’re still there, even with him running it?
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