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Has Walmart Made a Big Mistake Acquiring Flipkart?
May 11, 2018

Shocking, isn't it?

The valuation of Flipkart is equal to the combined valuation of India's largest retail companies.

And Flipkart has never made any profits. It reported an operating loss of Rs 45.8 billion in FY17 and is expected to report an operating loss of Rs 91.1 billion in FY20.

If Flipkart would have been a listed company, it would have never passed through the Smart Money Score. A company with no operating profits and just a hope of future profitably should be valued very strictly.

I believe, the valuation at which Walmart is acquiring Flipkart is insane.

With no operating profits and a strong competitor like Amazon, Walmart's shareholders are expecting a rough experience.

In fact, post the announcement of the deal, Walmart's share price declined by around 3%, which is around half of its Flipkart investment on day one itself.

Data Source: BSE, Walmart Press Release

This Chart Of The Day was published in The 5 Minute WrapUp - This Managing Director Failed to Change. He's Trapped and Not Even Aware of It!

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