You’ve probably already read the news on Bloomberg or Yahoo finance, but TFATB’s first week numbers for August have just come out, and they are big:
The market is going crazy. Some are saying buy and hold, others are taking more aggressive positions. It’s mayhem on the street right now. There’s also a lot of speculation. Some are crediting the financial success of the company to the increase in social media. Some are making connections to the price of oil. Some believe that it’s correlated to my great tan. The truth is no one knows. Luckily for you guys, I took an investments class and came in the top 50% in the class for the stock simulation project. I also worked in accounting for a publicly traded company and once accidentally added a percent as a whole number in the balance sheet and almost ruined their entire month end close. Good thing I don’t make mistakes twice.
During that time, I learned a lot of useful ratios to value a company. All of which I forget. With that said, I’ve created some ratios of my own that I feel are more useful when attempting to value a unicorn company such as my own. Here is my analysis. Please keep in mind, these ratios are actually true and come from real numbers:
Dollar/School Shooter Joke = $3.97/5 = $0.79
From this equation, we can derive how much money I make per school shooter joke. After some basic division, we find that I currently make $0.79 for every school shooter joke that I make. My dollar/school shooter joke ratio is at an industry high, with many speculators betting on that number to only grow. This number is a great way to forecast how much money I can make off making jokes on tragic events. Think P/E Ratio, but for companies that are made up of 1 kid writing jokes during class in an attempt to impress girls.
Earnings/ Four Loko = $3.97/$3.25(current market price of a Four Loko) = 1.22
Basically the same as the Sharpe Ratio, but not at all. This ratio illustrates the correlation between revenue, and the price of a Four Loko. It goes along the same lines as the Big Mac theory, where since it’s assumed the price of a Big Mac is constant among all currencies, you can assume that any price discrepancies can be credited towards over/undervalued currencies. My earnings are just a bit higher than the price of a Four Loko, which is normal for a company that’s total assets equal a box of t-shirts and a 2 year old HP laptop.
Four Loko’s / School Shooter Joke = $3.25/$0.79 = 4.113
From the calculations above, we can now compute how many school shooter jokes I need to make to buy 1 Four Loko. We simply do this by dividing the market price of a four loko (ignoring flavor differences and taxes), with the dollar/school shooter joke ratio. With that, we find that it takes a little over 4 school shooter jokes to purchase one Four Loko.
Hopefully this can give outside investors a better idea of the business side of my site. It feels great to finally put my finance degree to use. If any finance/economic professors are reading this, feel free to use this as a case study or class project. I’m considering sending this to the Harvard Business Review. Money never sleeps.