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I am not sure if these short sellers numbers are correct. Their arguments are all assumptions.
Even assuming their figures are spot on and Venture make 420 million dollars this year as per their forecast.
That is about $1.46 per share. They said that Venture should trade at 10 times forward earnings at most. Why only 10 times because a few others trade at 10 times ?
Different companies with different profit margins and with different moats may deserve a higher multiples
( or may not BECAUSE these are stocks trading in the stock markets and can trade at any multiples )
So who is to say that Venture cannot trade at 20 times or 30 times.
Stocks with poor balance sheets with no cash flows can have market value of $biliions.
And thousand of stocks worldwide with worse business than Venture trade at 20, 30, 40 times earnings.
I want to clarify that I am not arguing that Venture should trade at or deserve a higher valuations.
I am just saying that unless this company is a clear case of fraud or they practice false accounting they can and may still trade at multiples much higher than 10.
Maybe they are not old enough to remember what multiples Venture was trading at in 1999/2000 during the dot com era.
And yes if this is no bubble it can still trade at $29 on 20 times and if this is going to be another tech bubble you can argue that Venture can trade
to 50 times or more, IQOS or no IQOS.
Even assuming their figures are spot on and Venture make 420 million dollars this year as per their forecast.
That is about $1.46 per share. They said that Venture should trade at 10 times forward earnings at most. Why only 10 times because a few others trade at 10 times ?
Different companies with different profit margins and with different moats may deserve a higher multiples
( or may not BECAUSE these are stocks trading in the stock markets and can trade at any multiples )
So who is to say that Venture cannot trade at 20 times or 30 times.
Stocks with poor balance sheets with no cash flows can have market value of $biliions.
And thousand of stocks worldwide with worse business than Venture trade at 20, 30, 40 times earnings.
I want to clarify that I am not arguing that Venture should trade at or deserve a higher valuations.
I am just saying that unless this company is a clear case of fraud or they practice false accounting they can and may still trade at multiples much higher than 10.
Maybe they are not old enough to remember what multiples Venture was trading at in 1999/2000 during the dot com era.
And yes if this is no bubble it can still trade at $29 on 20 times and if this is going to be another tech bubble you can argue that Venture can trade
to 50 times or more, IQOS or no IQOS.