How does listed companies justify the cost of acquiring startup companies at unbelievable valuations

[mikewelsh]

EXample like Facebook and Yahoo buying new companies.

 

[WillLoxley]

They have the money. They want the company. Or they want the user base of the company. Or they want the people working in or who founded the company.

 

[Nuno]

And they don't want other companies to have them.

 

[WillLoxley]

And they don't want other companies to have them.

Yes! In terms of justifying it they're rolling around in the tech bubble 2.0 so can splash that non existent cash as much as they want.

 

[David Griffiths]

Who do they have to justify it to?

 

[Nuno]

Shareholders?

 

[UK Contractor Accountant]

One of the rules of business- take out the opposition by swalling them up before they start getting a foothold in your market.

 

[cjd]

They have a shed load of cash that they have no way of spending, they feel they need to stitch up a hole in their strategy and don't want to build it themselves, they spot an early stage competitor that might eat a bit of their lunch, they spot a company with customers of a demograph they want. Also, don't discount politics, stupidity and greed.