Phunware Inc (PHUN)

[candeloro]

@Drugdoctor

Can you explain your thinking behind the idea that a company that is having sales of 30 million US$ should be valued at roughly 700 million US$ (at 20 US$ share price).

The average S&P500 price sales ratio is 2.18

PHUN with 35 million shares outstanding and sales of 30 million US$ would have a p/s ratio of about 22.


That would mean you expect sales to go up 10 times over the coming quarters, when in fact their revenue is declining as per the statement in the prospectus.

By the p/s ratio the"fair" price would be at around 2 US$ and 4 US$ if they could double sales.

People way too often in investing in the stock market fall for visual traps like here.
People think that a stock coming from 550 US$ down to 5.50 US$ must be cheap, when in fact the shares compared to the average valuation of other companies in the same field are still expensive.