...these are PROPERTIES. It's like buying real estate...
Wrong! The "property" you own is a brand name and a share of a product market, just like all the companies Khalil mentioned. Real estate, except certain oceanfront properties, doesn't just evaporate, but market share and brand value can. Real estate's value might, of course, rise and fall dramatically, so if that's your analogy, consider what happens when a market gets overbuilt - in other words, when competitors enter your once exclusive domain. First, occupancy weakens, then rents (margins), then valuations. Then, sometimes, lenders come to own the property.
The list of "leaders" from the early days of PCs, workstations, computer games and software, household names at the time, who disappeared in relatively short order is long.
You own a brand and, yes, you can overpay for even a leading brand. Ask Quaker Oats. |
