they are giant advertising platforms, but spend most of their revenues and investor money on user acquisition through advertising. This is like a giant ponzi scheme really.
That's actually a really good analogy.
Twitter is a great example of this -- they went IPO at $28 billion freaking dollars.
They had no business model, assets, or revenue to support that valuation. It was all hype and "ZOMG, the Twitterz". Now, fast forward, it it loses ... what, $150 million per year? How do you do that on almost $600 million in revenues?
Tech companies have pretty much been starting out as grossly overvalued, by the end of the day when the big investors have laundered their profits, and the little guy is left holding the bag ... the stock is never worth the same again, at least not in the long run.
The value of tech stocks relative to actual value has rarely held up. Essentially they're all over sold as ad platforms, which in the long run never actually justify the original stupid prices they fetched.
Over the last 20 years (at least), tech companies have been a series of giant ponzi schemes of grossly overvalued companies which ultimately can't deliver on the bullshit hype.
Honestly, I don't understand how the financial industry works if it's all wishful thinking, bad math, and funny money. Oh, wait, they make their money up front, and then pass the shit on to the next suckers in the scheme, of course.
It just transfers money into the hands of big investors who buy in first, and leave everyone else wondering how they got fleeced. Exactly like a ponzi scheme.