The article argues much of the industry may not be profitable on using normal accounting and:
>the public markets have been valuing fracking companies not based on a multiple of profits, the standard way of valuing a company, but rather according to a multiple of the acreage a company owns.
A bit like valuing dot coms on eyeballs rather than GAAP profits. It all depends on oil prices and the like I guess though.
There's a difference between a company being profitable (revenues>income) and being profitable to investors (stock goes up). Oil companies are profitable, but bad investments, especially long term.
>the public markets have been valuing fracking companies not based on a multiple of profits, the standard way of valuing a company, but rather according to a multiple of the acreage a company owns.
A bit like valuing dot coms on eyeballs rather than GAAP profits. It all depends on oil prices and the like I guess though.