[jumpbug]

I don't get it. This is completely baffling to me that this is a company worth 9 figures.

[codeonfire]

You can't assume an efficient or even real market. Valuations are designed to benefit certain people. There's virtually nobody that would benefit from marking down the valuation of a company, and there are motivations that would lead to acquiring at inflated prices. For one, if you're buying something for the prestige of owning it you don't want to prove it worthless.

[gamache]

And worth nine figures to another company which appears (from TFA) to be worth nine figures itself. The Valley is amazing sometimes.

[AznHisoka]

1. Raise $100 million.

2. Hire 100's of talented engineers for above average salaries and perks.

2b. Make them do something that sounds challenging and hard to understand, but ultimately useless.

3. Sell to a greater fool as an acqui-hire for $150 million

4. Earn a few million in profit.

5. Repeat! (because you didnt get a 100X return, just a slim one)

[gamache]

Perhaps the take-away lesson here is that the hiring process hurts a lot, and companies will pay millions of dollars to avoid it.

[protomyth]

So, a startup that hires a bunch of developers to hack as a team on some open source project and fires quickly then flips the team to a bigger company[1] could work?!?

sadly, I thought of a domain name for this: teamchurn.com

1) obviously paying a chunk to the team

[rsobers]

It's only worth it because someone was willing to pay it. The last chump to hold the stock before the company unravels eats the loss. Early founders and VCs have cashed out long before that. It's an unfortunate game, selling dreams instead of substance.

[mattgreenrocks]

It's about generating noise rather than value...because humans.