Does Wall Street buy your growth story? For how long?

Rita Gunther McGrath (Executive Education, Columbia University, New York, New York, USA)
Alexander B. van Putten (University of Pennsylvania)
Ron Pierantozzi (Cameron and Associates)

Strategy & Leadership

ISSN: 1087-8572

Publication date: 19 March 2018



The article introduces the authors’ “ Imagination Premium™” metric which assesses the confidence of the investing community in a business’ growth strategy.


The article explains how the Imagination Premium is calculated and applies it to several cases--Amazon, Tesla and Buffalo Wild Wings.


Amazon’s implied value of growth was nearly four times its value from operations, a result completely consistent with its “profits are optional” motto. Amazon is a prototypical example of a company that is built to thrive in the ‘transient advantage economy.

Practical implications

Sky-high expectations for growth can be dashed by external events over which businesses have little control as Tesla found out. Unless a business can show, as Amazon has historically done, that it can turn expectations into gold-spun reality, lofty investor expectations can become a liability.


By applying the Imagination Premium concept to successful and problematic cases the authors illustrate the risks and advantages of a bold growth-before-profits strategy.



Rita Gunther McGrath, Alexander B. van Putten and Ron Pierantozzi (2018) "Does Wall Street buy your growth story? For how long?", Strategy & Leadership, Vol. 46 No. 2, pp. 3-10

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