Does profit still matter? | CNBC Explains

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  • Published on:  Thursday, August 23, 2018
  • What do Uber, Tesla and Spotify have in common? They are unprofitable, but still attract huge investments. CNBC's Xin En Lee explains why.-----Subscribe to us on YouTube: http://cnb.cx/2wuoARMSubscribe to CNBC Life on YouTube: http://cnb.cx/2wAkfMvLike our Facebook page:https://www.facebook.com/cnbcinternat...Follow us on Instagram:https://www.instagram.com/cnbcinterna...Follow us on Twitter:https://twitter.com/CNBCi
  • Source: https://youtu.be/PDA6nF-fxdo
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  • Rocky Hanoman

     9 months ago

    I think this video doesn't take into consideration one important point - Corporation Tax! Corporate taxes are charged on profits - so the more profit a company declares, the more corporate tax it will pay. As such, companies try to keep their profit declarations low by fiddling with their expenses. This way they can park 'surplus money' (which usually would be considered profit) offshore through transfer pricing and other means. Hopefully, the recent reduction in the federal corporation tax rate to 21%...

  • KaibaCorp HQ

     15 days ago

    Or I mean, companies could pay their share of taxes. No, people who own monsterous companies want to have their cake and eat it too, it doesn't matter how much it is they have to pay, it'll always be to much. While we're on this subject how about we discuss wages aswell? They're just fine selling their own fellow citizens out if it means lower wages in poorer countries, or hiring less people and automating things, or just plain being against wage increases; so no, the type of people to be CEOs of major...

  • EdgyVenoM

     5 months ago

    @Tyler Pearson what are you saying ? Net profits after tax are transfered to reserves or you can pay dividends whatever you want to do but that is after tax not before get your facts right or at least see an income statement of any company before commenting.

  • billy bob

     9 months ago

    Just a modern version of the dot Com bubble of 2000

  • wifilost

     9 months ago

    @Krishna Mohan I love you

  • Krishna Mohan

     9 months ago

    Nope. Dotcom was like premature ejaculation. This is the actual orgasm that was promised.

  • Mama

     9 months ago

    I think she remembered what she wore when she got that bike.🎈

  • Mike McGlock

     9 months ago

    That's because tech companies are in a bubble. For them, profit doesn't matter... it's how much debt they can take.

  • Best Korea

     9 months ago

    Smart bud

  • Jose Aguirre

     9 months ago

    I blame low interest rates, running a deficit is cheap and pays off in the long term

  • nothing

     9 months ago

    I think there has just been too much cheap capital in the financial markets for nearly a decade, and these sources of capital are willing to fund long term losses.

  • JY Lin

     9 months ago

    Investors are gambling Big time these days on IPOs hoping to find the next Apple or Amazon. Only few lucky ones gonna hit the jackpot. RIP

  • TRINITRON TV

     9 months ago

    josefin schwartz see even if one of them gives a big return softbank wins recently it sold 22 percentage of its stake of flipkart ( India's largest online marketplace , bigger than Amazon) for 5-6 billions I guess (that's big) and similarly they invest in many others and if even one of them gets big it's win win situation

  • josefin schwartz

     9 months ago

    What about Softbank? they invest bilions and billions in companies that are losing money. Wonder whats going to happen

  • Golden Squatch

     9 months ago

    Wework just sounds like a Library with no noise. lol

  • SamT

     9 months ago

    Investors has money to burn. As long no default, no issue.

  • Saisravan Satturu

     9 months ago

    Only growth matters