$FB It is not about FB valuations. It is about how fast prices have fallen down. It causes lot of pain to investors as they can't get out .
LNKD currently trades at a P/E north of 1,000X. It is obvious that investors are trading on LinkedIn’s future earnings, but Forward P/E analysis tells the same story. Based on earnings estimates over the next 12 months, LNKD’s Forward P/E is 108.3X. Based on average estimates of FB’s future earnings, its stock will be valued at a Forward P/E of 60X. Heck, even if the company’s earnings stay flat – which would be about as likely as the Mayan calendar being correct – FB stock would still be undervalued compared to LNKD.
Valuations are different different sectors. Social Networking sector valuations takes time to build it. They just started.
Your p/e multiple is baseless for new IPO companies. You can teach this model newbie's.
LNKD has p/e of 600, AMZN has p/e of 180 GRPN and ZNGA has not profit. Social networking is new sector. Each sector has it own p/e multiple.
Even with multiple formula of 100 p/e, it will price to
100 *0.65 = $65 per share.
IPO valuation is not always made same. "Potential" to convince plays bigger role in valuation. For example, if you convince that you have potential to land on Saturn, a pack of investors with line up with you. Then you have pressure to deliver it or attempt to deliver it. A business cycle work it same way. We need wait and watch if FB can succeed with their business model to deliver it. But simply hyping and then bashing will not lead into any productivity.
MS is 30 yr old. Ebay is 15 yr old. FB is still a kid, as your own kid. In each generation valuations evolve. Do not kill yourself with pricing and profits.
Gold priced 700$ in 1980's. Who ever invested in 1980 has to wait till 2004 to sell it. So in other words, it was a worst investment strategy!
Yes traders gets burned every time. It is because they change strategies often and do not stick to any rule. Learn to invest and grow with it.
When you did not invest it, what is your interest in bashing it ?. They just went to IPO, you need to shut up and wait and see.
When there is no difference, then why all of sudden this yelling about?. Is it make quick money? Then it is not called investment. Speculators can make money quickly as well as they loose money quickly.
Do not forget MS held price well on first day, not the quick/small investors.
Even if you have best product, you need to learn to sell in right time and economy. Steve Jobs learned his mistake, so he succeeded well on next product. If he died in 2003 on first cancer stroke, many would have never appreciated his talent towards technology.
So does FB. You need give chance to do well than bashing about its pricing.
All valuations are made by us. They are created through psychological methods. If you think sky is falling tomorrow, do not invest, go and hide in bunker.
Same Steve Jobs whacked Apple before he was fired in 90's. Back then, his poor decision over intel and microsoft killed Mac's product line.
Did Apple announce iPhone when they first go to public? FB has over 900M users, and it can come up with hundred's of products. You need to wait and see than bashing it.
Yes, Xerox went public with less than 50 mill cap. Wake up, yesterday is not today! Even our technology grows at exponential rate (forget about linear growth)