4 ms·
This IPO is based as much as the 'dream' of what FB can be than what it is. Here's something to think about: FB investments pre-IPO: $2.4 Billion, Google inves
by capred 14y ago
This IPO is based as much as the 'dream' of what FB can be than what it is.
Here's something to think about: FB investments pre-IPO: $2.4 Billion, Google investments pre-IPO: $25MM. Google's IPO was much smaller ($25B market cap if I recall) but Google was financially a stronger company when it went public.
Therefore cue music and grandiose mission statements. Wait, Facebook will get to that 18 P/E ratio when?
- oskarth 14y agoWhere did you see real/projected P/E ratios?
- capred 14y agoIts not listed but tech stocks like apple and google hover around 15-20 P/E. That means that the FB has to grow their earnings so their P/E ratio ends up being in line with the industry or their stock falls. I.e. either Price moves or Earnings move. This doesn't happen immediately - right now LinkedIn is around 1,000- but the market or company needs to correct itself overtime. While its "correcting" that means earnings will go up w/o the price doing the same thing. That means as a current shareholder, lots of future value accretion has already been priced in (i.e. the stock wont rise like Google or Apple in the last 10 years, which was being fueled by increased earnings). Of course P/E is only 1 metric, but its a really important one.