So, basically, all the value of Tumblr was in the porn. Once they banned that, it lost 99% of its value. Verizon/Yahoo bought it for $1.1B, banned the porn, and then sold it for $10M. Less than 1% of the purchase price. Impressive!

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That or it's value was that it was new and exciting. Then Yahoo failed to do anything interesting with it (as they would) and everyone realized that it wasn't worthwhile.

Valuation before it goes into a major company should be based on possibility. After a major company it should be in the actual incomes derived from it. The idea is that the major company should have turned it into a cash cow, but didn't, so it's real potential is relieved, none. Of course most things with entirely speculative value go to zero, because 1% of things with speculative value go to 100x or more.

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Yahoo did not seem to understand where any of the trends were going.

If they had gone all in on Tumblr's media features adding full video hosting and easy live streaming to Tumblr it would have retained the vale.

Because Tumblr had outlasted Meerkat & Vine at this point. And as of this month Google removed the Hangouts on Air app that allowed easy streaming to YouTube.

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