Valuations Don't Matter (EP.148)

Animal Spirits Podcast

The Compound

News, Business News, Investing, Business

4.7 • 2.1K Ratings

🗓️ 27 May 2020

⏱️ 52 minutes

🔗️ Recording | iTunes | RSS

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Summary

We discuss why Zoom is worth more than the 5 biggest U.S. airlines, how many of the pandemic stocks are here for good, Spotify taking over the podcast game, Amazon possibly buying JC Penney, winners and losers from the WFH trend, the summer bull case for Airbnb, why alternative ETFs haven't worked, what happens to the conference industry and much more. Find complete shownotes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Like us on Facebook And feel free to shoot us an email at animalspiritspod@gmail.com with any feedback, questions, recommendations, or ideas for future topics of conversation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Today's Animal Spirits is brought to you by Why Charts.
0:02.8	Welcome to Animal Spirits, a show about markets, life, and investing.
0:08.0	Join Michael Batnick and Ben Carlson as they talk about what they're reading, writing, and watching.
0:14.6	Michael Batnick and Ben Carlson work for Ritholz Wealth's Wealth Management.
0:18.1	All opinions expressed by Michael and Ben or any podcast guests are solely their own opinions and do not reflect the opinion of
0:24.0	Ritholz wealth management.
0:25.5	This podcast is for informational purposes only and should not be relied upon for investment decisions.
0:30.6	Clients of Ritholz wealth management may maintain positions in the securities
0:33.6	discussed in this podcast. This has been making the rods. I saw it last week and I saw
0:38.3	it a few weeks ago. Zoom is now, Zoom the video conference company is now worth more than the five major airlines,
0:45.3	which is Southwest Delta United American Airlines and JetBlue.
0:49.8	Those five collectively are worth $45 billion. The market cap of the Zoom is $48 billion. And I know that this is comparing apples to peanuts, but
1:00.0	traveling 12 month revenue for Zoom, which is growing 100% year over year, 622 million.
1:05.4	Okay, 622 million. So it's training at 78 times sales. If you look at the price of sales ratios of companies in the Russell 1000, the highest is Moderna, which was that vaccine company that we saw spike last week. I think we spoke about that. That's training at 442 again. Extra extraordinary circumstances given what's going on with
1:25.0	people anticipating their vaccine but other than that there's a few outliers but the
1:29.8	highest is like you got one at 68 at 54 at 43 at 40 again Zoom is training at 78 and we know why
1:37.9	They've been a huge beneficiary of what's going on but listen to this
1:42.0	Delta and United and American each did over $40 billion of
1:48.5	revenue in the most recent 12 months. They each, all three of them did over
1:52.4	40 billion. So these five companies have a total of
1:55.6	257 times the revenue that Zoom does. And I know that it's dumb to just compare revenue
2:01.9	because these airlines might not even exist 12 months
	...

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