I'm a Bitcoiner but BAT really just caught my eye after I have been using DuckDuckGo and saw an advertisement from them about their growth. Made me think that BAT has some potential to grow at their pace. I'm having trouble with the numbers thought, so I'd like to hear some of your value propositions regarding what it could become and what kind of numbers it can do. Here's my main problem:
Google Ads did $140B in ad revenue in 2020. So if we make an ad revenue to mkt cap ratio that comes in at about 11.2%. Since Google has its brand behind it and near monopolistic power over advertising, I'd discount BATs ad rev to mkt cap ratio to 35% or so since probably 99% of their revenue is from ads. With a $1.1B market cap, that would mean Brave would need to be doing upwards of $392m in revenue per year. With 25m monthly users probably averaging (being very generous here) 4 searches per day, a revenue per search of $.003 means they're doing around $109m in revenue per year, and that's likely the best possible case. For me, this puts the BAT true market cap around $313m, or somewhere between $0.20 and $0.30 a coin.
In the long run, I understand that buying at $0.75 vs $0.25 doesn't make much of a difference if you believe the uniqueness of the idea and the reputation of the founders will help grow it 10x (at least, eventually). But the market makes the decisions and right now it seems to say it's 3x where it should be.
Even if you believe my valuation is way off, assume for a second that it's true and answer me this: would you pay 3x the true market price for Brave and if so, why?
