Dark Clouds Forming For Cloud Computing Companies
March 31, 2014
Grazed from SeekingAlpha. Author: Michael Blair.
Salesforce.com (CRM) is one of a pile of Cloud computing companies sharing space in a market deeply into "bubble" territory where dark Clouds are forming and we are heading for a storm. The silliness is evident in Cloud storage firm Box Inc. filing for an initial public offering despite massive losses since it started up with its deficit reaching $361 million by January 31, 2014.
Almost half that cumulative deficit came from Box Inc.’s $169 million loss in the fiscal year ended on that date, according to its SEC filings. Profits are not expected any time soon. The lack of profits in current operations is seen as a positive by investors in Cloud companies as I see it – no pesky analysis of price earnings multiples and no easy way to tell when a stock is undervalued, richly valued or overvalued…
As long as there is the prospect of sales growth, the market is buying in and paying up for the privilege. Traditional and more conservative companies with big interests in the Cloud include Microsoft (MSFT), SAP (SAP), Oracle (ORCL), IBM (IBM), Google (GOOG) and Amazon.com (AMZN)…
Read more from the source @ http://seekingalpha.com/article/2118343-dark-clouds-forming-for-cloud-computing-companies
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