Broke billionaires (and other ridiculous signs of the top) | Sovereign Man
And he’s definitely not the only ‘billionaire’ in this situation. All across Silicon Valley (and much of the world) we see tech entrepreneurs loaded up with shares of their loss-making businesses, but short on any actual money.
The founder of Snapchat is worth more than $3 billion thanks to his company’s stock price; yet the business has lost billions of dollars since inception and has never generated positive cash flow in a single year, ever.
Uber, WeWork, Lyft, Slack, Peloton, Pinterest– there are so many tech companies, or companies masquerading as tech companies– that consistently lose tons of money. It’s absurd.
In finance, a startup that eventually becomes worth more than a billion dollars is referred to as a ‘unicorn’ because it’s supposed to be so rare that it borders on impossible.
Now, I remember my parents taking me to the circus when I was a kid, and the feature attraction was supposed to be a unicorn. I must have been around 4 years old and I couldn’t have been more excited.
Finally, after seeing the bearded lady and the lion tamers and all that jazz, they finally paraded the unicorn out for all the spectators to see.
Even as a little kid I knew instantly– it was just a friggin’ donkey with a fake horn on it.
And that’s basically what these companies are– donkeys with fake horns. They’re not real unicorns.
They bleed cash. Many of them have no hope of ever turning a profit. And the rock-star famous people who own them are often just “Billionaires In Name Only,’or BINOs.