Quit the whining Nokia wins this round
Meanwhile, down on Wall Street some people are still whining about how much Nokia paid for Navteq, referencing silly EBITDA ratios. They’re drinking the short-term, make-me-rich-today-not-tomorrow Wall Street Kool-Aid. The EBITDA ratio is just a current guesstimate calculation, and means almost nothing about the real value of a company in the future. It would be like saying the value of a used car can be based upon a ratio of the model year to the number of miles on the car.
Let’s see that means a 1985 Ferrari 308 with 50,000 miles (ratio .0397) is clearly not worth as much as my wife’s 2003 Toyota Corolla with 45,000 miles (ratio .0445). Anyone who pays more for the Ferrari is a fool. It must be true, that’s what the numbers say. The opposite kind of Kool-Aid is the flavor that over-values companies like Facebook. Those same people can use a different analysis and say Nokia paid too much for NAVTEQ. Wall Street logic just doesn’t work sometimes.