Valuing firms with negative multiples
If I am looking at EV/EBITDA firm 1's is more negative than firm 2 (both negative). What can you say about this?
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Go up the income statement in terms of multiples. If negative EBITDA, do EV/gross profit. If negative gross profit, do EV/sales.
If sales is 0, do EV/hope (works for Nikola, once a $25 billion market cap company with $15,000 of solar panel revenue).
EV/Hope LMAOO
You buy on EV/Hope, sell for EV/EBITDA.
Key risk: never gets EBITDA positive, or even revenue positive.
great insight dickthesellsider
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