Currently, the stock price of Station B has shrunk to one-eighth of its peak, making many fans of the company quite disappointed. Analyzing the reasons, many people often focus on:
1. The growth rate has slowed, and some businesses have created a sense of bottleneck;
2. Some business difficulties (games).
The core view is that business operations have fallen short of expectations, and only then have this result. These opinions are all very marketable. After the release of the 2022 Q4 earnings report, some opinions also mostly revolved around the above issues. We do acknowledge the importance of these factors in business valuation, but in this article we'd like to add our understanding:Mismatch between enterprise development path and market expectations.
The core ideas of this article:
First, the market likes enterprises with high growth and low risk (due to natural aversion to risk). The current fundamental performance of Station B has divided the market, and now the differences are subsiding;
Second, the progress of settlement of differences determines the stabilization of stock prices, and behind this is definitive feedback on profitability. Currently, depending on the progress of settlement of differences, it will continue for some time;
Third, whether Station B can open source and find new profitable channels determines the progress of definitive arrival.
The mismatch between reality and expectations causes fluctuations
The stock price of Station B took off after the Federal Reserve released water in 2020. We also all know that an extremely liquid environment will change market preferences, and growth stocks will now become a scourge for the market to chase.
However, there is another layer of logic behind it. The more clear the expectations, the less risky the enterprise, the more leverage it can leverage. Simply put, in the “Chinese version of YouTub...