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Goldman Sachs did it... so they must be right.. There are many reasons Goldman Sachs did the deal. If Facebook goes public and chooses GS as the financial inst

Goldman Sachs did it... so they must be right.. There are many reasons Goldman Sachs did the deal. If Facebook goes public and chooses GS as the financial institution to do the paperwork, that's one reason. In addition, if they believe speculation will drive Facebook stocks up after the IPO, then it's a good investment. Overall at 70billion valuation, Facebook has a P/E of 170 ~ ish. So earning 1 million dollar will drive the valuation of Facebook to 170 million. Let's try to use some common sense in this. Either Facebook start to monetize like crazy, like earn 10 billion profit next year, 10x of what it was this year, or the valuation has a problem?

bl4k 16y ago
You can't really treat Facebook stock in that way, for two reasons: a) They aren't putting in financial performance to impress investors. They are growing the company. b) Treat it more like a resources stock were they have large mining leases and rights, have started exploration but are 2-3 years away from actually mining anything.
- imkevingao 16y ago
  that's how the dot com boom happened in the turn of the century. Everybody thought the tech companies were like mining resources and silicon valley young stars were all getting rich as if they found the next petroleum site... except when it came to harvest profit, they couldn't meet the ultra high expectations... and the bubble goes "pop" There are lots speculation that says Facebook is a bubble, I honestly think it has a lot more potentials as well, and it could potentially meet its expectations, but I don't think Mark Zuckerberg is exactly the right guy to meet the $50b or $70b expectation that investors believe.... I mean the guy is a legend and he continues to build amazing stuff for the world, but when it comes down to monetization, it's not cool, but maybe he'll find a cool way to make Facebook money.
  - bl4k 16y ago
    Ye I think that is the difference. Most resources stocks have risk built into the price (from nationalization through to a drop in minerals demand) but Facebook hasn't done much wrong in the past 5-6 years.

bl4k 16y ago

You can't really treat Facebook stock in that way, for two reasons: a) They aren't putting in financial performance to impress investors. They are growing the company. b) Treat it more like a resources stock were they have large mining leases and rights, have started exploration but are 2-3 years away from actually mining anything.

imkevingao 16y ago
that's how the dot com boom happened in the turn of the century. Everybody thought the tech companies were like mining resources and silicon valley young stars were all getting rich as if they found the next petroleum site... except when it came to harvest profit, they couldn't meet the ultra high expectations... and the bubble goes "pop" There are lots speculation that says Facebook is a bubble, I honestly think it has a lot more potentials as well, and it could potentially meet its expectations, but I don't think Mark Zuckerberg is exactly the right guy to meet the $50b or $70b expectation that investors believe.... I mean the guy is a legend and he continues to build amazing stuff for the world, but when it comes down to monetization, it's not cool, but maybe he'll find a cool way to make Facebook money.
- bl4k 16y ago
  Ye I think that is the difference. Most resources stocks have risk built into the price (from nationalization through to a drop in minerals demand) but Facebook hasn't done much wrong in the past 5-6 years.