Social Media Site Loses $58 million

[Edge]

How by any measure does a website lose $58+ million in one year of operation?

Google the title for the report - I've been running websites for a quarter of a century and haven't come close to spending $100K - including development. Envision how this is lost and explain this to me.

[LifeinAsia]

First, there's a huge difference between a company and a web site (the entity in question is a company, not just a web site). Second, companies lose millions or even hundreds of millions of dollars all the time- it's almost a non-issue at this point. Especially when they have multi-billion dollar capitalizations- a few millions of dollars is almost petty cash level.

I have no idea how many employees the company in question has, but I'd imagine quite a few of them have $100K+ salaries. That's just on the IT side. C-level execs are going to have much higher salaries than that. That doesn't even factor in workman's comp insurance, training expenses, and employee benefits (esp. health insurance rates, which continue to increase annually). There are also costs associated with hiring/firing employees.

Employees need a place to work. Commercial real estate prices have been dropping, but they're not free (yet, anyway).

[phranque]

interest expenses amounted to $40M which is 10X annual revenue and represents almost 70% of 2023 losses.
business expenses were 3.5X annual revenue.

market cap is thousands times annual revenue.
how do you say meme stock without saying "meme stock"?

[Edge]

how do you say meme stock without saying "meme stock"?

Yes that, I think if there's a point, I want to make is that there's some serious over spending on the development of a Twitter like website.
I suspect that money is flowing into somebodies’ pocket for the sole purpose of personal profit without regard for the survivability of the business model or website.

I have always invested my money and time in my web business with an eye on the future and the profits that come with success.

I have a competitor who in the early days (pre-1999) captured a high visibility URL and then went public in penny stocks out of Canada they managed to raise approximately $18 million (I bought 2 shares for info). They proceeded to spend money at a crazy rate with a rented building, servers in the basement, 24/7 admins, software development and an executive team. They never created a profitable business model to justify the initial stock valuation. Eventually the stock fell to almost nothing with a company value of less than $200K and got bought out by a private investor. I understand that they adjusted their spends with a managed dedicated server, limited remote staff and commission based sales person like they should have on startup.

This website is still in operation however their revenue is unlikely to be greater than mine based on historical information I have.
Stock hype does not create a successful and surviving web-based business

[tangor]

Folks never seem to use OPM (other people's money) quite as well as if it were their own investment.

Nature of things.