The top US securities regulator has warned that technology companies with lots of users will not always translate them into large profits, in comments that appeared to be timed to coincide with the eve of Twitter’s much-anticipated initial public offering. Mary Jo White, chair of the Securities and Exchange Commission, questioned whether investors could understand a company’s future prospects when they were bamboozled by the “sheer magnitude” of user numbers that might bear no relation to profitability.
November 6th, 2013 at 4:50 pm
Tech user numbers do not equal profit, warns SEC
The top US securities regulator has warned that technology companies with lots of users will not always translate them into large profits, in comments that appeared to be timed to coincide with the eve of Twitter’s much-anticipated initial public offering. Mary Jo White, chair of the Securities and Exchange Commission, questioned whether investors could understand a company’s future prospects when they were bamboozled by the “sheer magnitude” of user numbers that might bear no relation to profitability.