P/E's can be higher for short periods of time, but they usually and quickly normalize, as shown in that chart, but even so...in comparison to those companies listed, it would take LinkedIn and Facebook, combined, about 5 years to make what Apple makes in a single quarter (and I'm talking profit, not revenue).

 

Even with that said, the P/E ratios in that chart, even at their HIGH's were half of Facebooks current, and about 1/6th what LinkedIn is currently at.

 

As I said, these new .com's are vastly overvalued.

 

The normal revenues double over the first two years after the average IPO since 1996. That changes those numbers a lot.

The normal revenues double over the first two years after the average IPO since 1996. That changes those numbers a lot.

 

Even with that, these new IPO's will be vastly overvalued. These are INSANE multiples.

P/E's can be higher for short periods of time, but they usually and quickly normalize, as shown in that chart, but even so...in comparison to those companies listed, it would take LinkedIn and Facebook, combined, about 5 years to make what Apple makes in a single quarter (and I'm talking profit, not revenue).

 

Even with that said, the P/E ratios in that chart, even at their HIGH's were half of Facebooks current, and about 1/6th what LinkedIn is currently at.

 

As I said, these new .com's are vastly overvalued.

I couldn't find a graph with Google going back to it's IPO in 2004, but it's PE ratio was up over 60 at the least at that time (with substantial revenue growth that year, so it would probably have been higher a week after the IPO0.

Ah, here we go, thank you Google for helping me find this.

Valuation of the Facebook and Google IPOs would not give useful information about their futures. At the time of Google’s IPO, it had a P/E of 195 and P/S ratio of 21.3. The business has grown significantly since then and the P/E has come down to 19.65. Facebook’s IPO P/E, if they value the company at $100 billion, will be 100, and the P/S will be 27.

I couldn't find a graph with Google going back to it's IPO in 2004, but it's PE ratio was up over 60 at the least at that time (with substantial revenue growth that year, so it would probably have been higher a week after the IPO0.

 

Googles P/E ratio at IPO was 67, with a stock price of 85$. STILL vastly lower than these other companies, not to mention Google's projected revenue growth was higher than LinkedIn's/Facebooks by an astounding amount.

 

As I said a few times now...overvalued.

 

Edit: Found a lot of conflicting reports on this. Issue is, Google's avenue of growth was massive in comparison to Facebook's. Facebook already has close to 1 billion users...which is about it, there isn't much room to grow in terms of user base now, aside from account duplicating. Currently, FB values each user at about 4$. They need to find a way to get them valued at over 200$ to seek the growth Google saw...

 

Not happening.

Edited May 25, 201213 yr by Y2HH

Google's core business has changed so much since then its almost not the same company.

Googles P/E ratio at IPO was 67, with a stock price of 85$. STILL vastly lower than these other companies, not to mention Google's projected revenue growth was higher than LinkedIn's/Facebooks by an astounding amount.

 

As I said a few times now...overvalued.

 

Edit: Found a lot of conflicting reports on this. Issue is, Google's avenue of growth was massive in comparison to Facebook's. Facebook already has close to 1 billion users...which is about it, there isn't much room to grow in terms of user base now, aside from account duplicating. Currently, FB values each user at about 4$. They need to find a way to get them valued at over 200$ to seek the growth Google saw...

 

Not happening.

The key is though that they already have a huge huge huge captive audience...finding the ways to generate revenue would seem to me to be the much easier part of the equation...I don't know much about the stock market, and I agree that the stock is currently overvalued, but I wouldn't sleep on it too much...if it were to drop into the $20 range I would definitely consider buying a decent chunk...

The key is though that they already have a huge huge huge captive audience...finding the ways to generate revenue would seem to me to be the much easier part of the equation...I don't know much about the stock market, and I agree that the stock is currently overvalued, but I wouldn't sleep on it too much...if it were to drop into the $20 range I would definitely consider buying a decent chunk...

 

They also flooded the market with shares...I've never seen a company IPO with over 2 billion shares on the floor, which only equates to a fraction of the actual company size. They have an absurd amount of shares...and I find this entire thing very odd. There are red flags all over this.

 

The problem is their penetration is huge already, and there isn't much room to grow aside from in a few third world nations, or China...which probably won't be happening anytime soon. Even so...they have a CURRENT user base of hundreds of millions and they cant find a way to value their users at more than 4$ each. They're also starting to lose users because of their constant changes.

 

I don't know, personally I could care less...I have Facebook, but if it went away tomorrow I wouldn't care...there are plenty of alternatives.

One area that has started to intrugue me about FB is how often I contact people through their FB accounts. I know probably six or seven people in the real world, who I have phone numbers, emails, etc and I will message them through FB first because I know they will see it almost instantly. I'm not certain how that can translate to bigger profits, but it is interesting.

Even with that, these new IPO's will be vastly overvalued. These are INSANE multiples.

 

The revenues aren't going to stay there.

Googles P/E ratio at IPO was 67, with a stock price of 85$. STILL vastly lower than these other companies, not to mention Google's projected revenue growth was higher than LinkedIn's/Facebooks by an astounding amount.

 

As I said a few times now...overvalued.

 

Edit: Found a lot of conflicting reports on this. Issue is, Google's avenue of growth was massive in comparison to Facebook's. Facebook already has close to 1 billion users...which is about it, there isn't much room to grow in terms of user base now, aside from account duplicating. Currently, FB values each user at about 4$. They need to find a way to get them valued at over 200$ to seek the growth Google saw...

 

Not happening.

 

 

The NY Times values each of their customers over $20.

The NY Times values each of their customers over $20.

 

The NY Times can value each of their customers at whatever they want...it's mathematical, not a "guess". The NY Times is flat out wrong on this.

 

The fact is, when you do the math based on their actual numbers, "Facebook earns a mere $4.84 in revenue per user per year, and just more than $1 a year in profit per user."

 

Now, while I'm sure that number will grow, it will not grow THAT much. It will take years for them to get that number up to 20$.

 

"While Facebook’s past growth has come from new sign-ups, the bulk of its future growth will have to come from wringing value out of its existing users. But the financial data in Facebook’s latest IPO amendment reveals that Facebook’s revenue per user has been relatively flat. In fact, despite its still-growing user base, total revenue dipped in the first three months of this year, and the company’s quarterly profit was the lowest it’s been since 2010."

Edited May 25, 201213 yr by Y2HH

One area I see FB leveraging better are business customers. More and more businesses are seeing FB as basic a necessity as the yellow pages were to our grandparents. Also, our grandparents all have FB accounts. Having siad that, I could also see them closed in ten years as something better comes along.

...and to be sure, I'm not saying Facebook isn't a good company...it's profitable, it has a sustainable business...but it's overvalued by a large amount...as most modern tech IPO's are. Mostly because investors are trying to not "miss the next big thing"...which is what created the first .com bubble in the first place...it's just funny watching them make the same mistakes again.

 

Facebook and LinkedIn are decent companies, they make money...and have a product people use. The issue isn't that...the issue is that to justify their current valuations, Facebook needs to make about 50 times more money than it is (and that's a lot, since it means they'd be making more than Apple...which isn't happening), and LinkedIn...well...they need to make about 500 times more.

The NY Times can value each of their customers at whatever they want...it's mathematical, not a "guess". The NY Times is flat out wrong on this.

 

The fact is, when you do the math based on their actual numbers, "Facebook earns a mere $4.84 in revenue per user per year, and just more than $1 a year in profit per user."

 

Now, while I'm sure that number will grow, it will not grow THAT much. It will take years for them to get that number up to 20$.

 

"While Facebook’s past growth has come from new sign-ups, the bulk of its future growth will have to come from wringing value out of its existing users. But the financial data in Facebook’s latest IPO amendment reveals that Facebook’s revenue per user has been relatively flat. In fact, despite its still-growing user base, total revenue dipped in the first three months of this year, and the company’s quarterly profit was the lowest it’s been since 2010."

 

No, it is their stock value.

No, it is their stock value.

 

Well yes, based on their stock value...but based on reality, it's just not there.

...and to be sure, I'm not saying Facebook isn't a good company...it's profitable, it has a sustainable business...but it's overvalued by a large amount...as most modern tech IPO's are. Mostly because investors are trying to not "miss the next big thing"...which is what created the first .com bubble in the first place...it's just funny watching them make the same mistakes again.

 

Facebook and LinkedIn are decent companies, they make money...and have a product people use. The issue isn't that...the issue is that to justify their current valuations, Facebook needs to make about 50 times more money than it is (and that's a lot, since it means they'd be making more than Apple...which isn't happening), and LinkedIn...well...they need to make about 500 times more.

You want to know what facebook's main purpose is to other business right? They OWN global identities across the board. Have you ever approved a fb app or signed into a site using your FB OAuth credentials? FB owns a large portion of the worlds (US especially) personal information. The advertising is somewhat secondary moving forward IMO.

One area I see FB leveraging better are business customers. More and more businesses are seeing FB as basic a necessity as the yellow pages were to our grandparents. Also, our grandparents all have FB accounts. Having siad that, I could also see them closed in ten years as something better comes along.

 

Facebook is so vastly overrated. It's useful to share pictures and news about yourself, but who honestly goes onto facebook to view a product or business? I mean, I hate facebook and the entire idea behind it ("Look at me! Look! Look! Over here!") so perhaps i'm a little biased in thinking this way.

 

 

Facebook is so vastly overrated. It's useful to share pictures and news about yourself, but who honestly goes onto facebook to view a product or business? I mean, I hate facebook and the entire idea behind it ("Look at me! Look! Look! Over here!") so perhaps i'm a little biased in thinking this way.

As an end user thats true, there is a much bigger story to having a universal identity store out on the internet that other companies can leverage. It's a HUGE value push for these companies to own the identities on the internet so that large organizations can link into them.

As an end user thats true, there is a much bigger story to having a universal identity store out on the internet that other companies can leverage. It's a HUGE value push for these companies to own the identities on the internet so that large organizations can link into them.

 

But does that actually work? Does anyone remember "keywords?" How's that fairing for AOL these days?

But does that actually work? Does anyone remember "keywords?" How's that fairing for AOL these days?

The technology wasnt there back then. Trust me, a universal identity store is a total feasible future and facebook etc are racing to be that store. Its incredibly valuable.

You want to know what facebook's main purpose is to other business right? They OWN global identities across the board. Have you ever approved a fb app or signed into a site using your FB OAuth credentials? FB owns a large portion of the worlds (US especially) personal information. The advertising is somewhat secondary moving forward IMO.

 

No, I never do these things.

 

I don't cross share app information, ever. As a matter of fact, every time I use Faceook, I log off when I'm done. I don't like them seeing what sites I browse next, etc.

 

Most people, I realize, don't care...but most people are suckers...and that's why they're hacked/compromised and have no idea.

Edited May 25, 201213 yr by Y2HH

No, I never do these things.

 

I don't cross share app information, ever. As a matter of fact, every time I use Faceook, I log off when I'm done. I don't like them seeing what sites I browse next, etc.

 

Most people, I realize, don't care...but most people are suckers...and that's why they're hacked/compromised and have no idea.

But 99.9% of the populace does.

 

EDIT: Damn you added your edit just as I hit reply.

Edited May 25, 201213 yr by BigSqwert

But 99.9% of the populace does.

 

EDIT: Damn you added your edit just as I hit reply.

 

You're always one step behind...probably because you're 7 foot 100 inches and as slow as Konerko.

The technology wasnt there back then. Trust me, a universal identity store is a total feasible future and facebook etc are racing to be that store. Its incredibly valuable.

 

I guess I don't see how that creates $ for a business at the end of the day.