Tech Multiplies are Valid

The meme that you want to be labeled a “Tech” company by Wall Street to increase your multiple has reached maturity. PMost consumers or transmitters of the meme only know the meme itself and not the underlying facts that created it.

Here is a simple explanation of why these P/E multiples are valid and simple to understand.

It comes down to two simple equations

Firstly, the cost to move atoms is vastly greater than the cost to move digital bits


Secondly, the cost to move digital bits is approximately zero


That is why Tech companies have and deserve a larger P/E multiple than traditional asset heavy companies. They provide value to customers by moving digital bits instead of moving physical atoms.


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