If we're going to be pedantic about it, it's not revenue that determines price, it's earnings, and specifically the expectations of future earnings. And it sti

If we're going to be pedantic about it, it's not revenue that determines price, it's earnings, and specifically the expectations of future earnings. And it still makes absolutely no sense. HP has a great track record over the last decade of generating solid profits. I understand why they have a low PE ratio, the market is anticipating very slow growth. However, Facebook's growth meanwhile is slowing significantly, and they're IPO'ing at perhaps 120 times earnings (or more). That's a very large bet that Facebook will figure out how to accelerate their growth again. The market is wrong in its pricing of Facebook, and retail investors are going to suffer for it. Facebook is a compression trap. You slow their growth to 35%, peg their PE ratio to 35 times, and they need $3 billion in profit to justify their IPO price. Growing at 35% it would take Facebook about five years just to trade at a reasonable valuation. These things correct themselves one way or another; either FB accelerates, or the market will slice it in half in the next year to 18 months.