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"for Facebook to justify a $75-100 Billion valuation it would need to grow its earnings by an order of magnitude" Even if this was true (and personally I don't
by linuxhansl 15y ago
"for Facebook to justify a $75-100 Billion valuation it would need to grow its earnings by an order of magnitude"
Even if this was true (and personally I don't doubt that it is), it won't matter. FB will go public at a valuation of $100bn, and people will buy the stock. I am willing to bet on this.
The stock market is rarely driven by business fundamentals these days it seems, but by perception and a form sheep mentality of the (mostly individual) investors.
- veyron 15y agoThere's very little evidence that the individual investors would buy in at that range. As evidence of faltering IPO demand, check out what happened to Zynga -- took about 10 minutes to fall below ipo price.
- pbreit 15y agoThe fact that Facebook is already trading at $100 billion is decent if not strong evidence that investors, individual or otherwise, would buy at that range. And Zynga quickly moved above its IPO price where it now sits.
- veyron 15y agoIt moved above the IPO price due to the Facebook IPO announcement and the related launch of the social media ETF (Tape C, ticker SOCL)
- scorpion032 15y ago> The stock market is rarely driven by business fundamentals these days it seems, but by perception and a form sheep mentality of the (mostly individual) investors. Except until it is a bear market; which it is every couple of years and everything is priced based on it's fundamentals.