InvestorQ : Why is it that most loss making digital IPOs are getting solid valuations in the market and Is this sustainable?
Juvina Maggie made post

Why is it that most loss making digital IPOs are getting solid valuations in the market and Is this sustainable?

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Deepa Salunkhe answered.
2 weeks ago
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We really have to wait and see because the slew of IPOs are raising tough questions. As of now, it is more about eyeballs and footfalls. We have seen in the past that eyeballs and footfalls do not matter if they don’t eventually translate into profits. That is not really happening at this point of time. It is about everybody from Nykaa to Paytm to Policybazaar and Zomato wanting to own their specific ecosystem, but profits are still missing.

There is one more argument about weak currencies or devalued currencies, which is true of most currencies in the world. When the currency devalues structurally, the whole idea of profits, P/E ratios and valuations are not relevant. It is more like the Greater Fool Theory where each person buys hoping that somebody will come and buy at a higher price. Degraded currencies are making even losses look wonderful.

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