system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5 - How can a company be worth billions of dollars but have little to no revenue?
gpt
The value of it's holdings is independent from the revenue it generates.

Let's use personal wealth as an example. Let's say you own a house and rent it out, using the rent as your only income. It is worth $1,000,000 and you are renting it out to a family for $3,000 a month. That's $36,000 a year in revenue, but your net worth is $1,000,000.

It is the same for companies. A company has a value independent of their actual true income, and this helps the company by allowing them collateral when they borrow money.