The underlying issues are the facts that need to be addressed.

X years ago, what was FB's user base, how much was it growing, could it be disrupted, and how much were they spending on ops/acquisitions ... and of course, how many $ could they squeeze out of each user are the fundamental questions.

The article is not unfair.

Uber is a great business that is probably wildly over-priced at this point.

The "underlying issues" are things Uber management (1) understands better than outsiders looking in; (2) they're actively working to address; and (3) they have vastly-superior metrics to understand their own internal growth rate. They want to stay private precisely for this reason: They don't want to answer whiny questions from people who think they know better.

"Wildly overpriced" is speculative on your part (at best). This isn't a publicly traded stock. It's preferred stock, and valuation is ~1 line item in a contract that probably spans dozens of pages. Those other T&C's matter a lot: liquidation preference, participating preferred, etc. Those newest investors are certainly getting superior liquidation preference, and likely getting guaranteed ROI.

No - it's definitely not the 'same story' :)

The same was said about Google and FB, and Amazon - and they are doing very well.

It was said about Twitter and they are failing.

These companies are all quite different.

Companies aren't blindly paying FB billions of dollars for ads without verifying they actually deliver a return... Clearly it's working, that's the reason so many companies pay for them.

Sure, they could probably get better at managing "click farming, bots, etc", but despite these things, advertising on FB has proven incredibly valuable and there's no clear indicator that'll change soon. If anything it'll just grow more valuable across a larger user base, hence their lofty P/E ratio (implying growth).

Yes Facebook is earning money but will it be a great business to justify 300B+ valuation in long term?

The market assumption is that they can probably grow their /user revenues quite a lot because they're not getting that many new users.

I suggest that FB is probably a very viable, very profitable company long term, but that their stock is probably over-valued.

From an investors perspective, it may have nothing to do with the reality of underlying fundamentals - but how other investors will perceive them. Ergo - FB may still make a great investment if you think they will come out with some new shiny products to keep other investors hopped up on the juice.

Purely by the books, they are about 4x overvalued right now.

10x price/earnings is the normal place for a healthy, strong, reasonably growing company.

But FB is stabilizing - https://www.wolframalpha.com/input/?i=facebook+p%2Fe+ratio+c... - P/E is dropping even as stock is going up. Market is betting that in a couple of years revenue growth should stabilize.

Agreed, but in order to justify the massive P/E they would have to be growing quite a lot for the next 10 years.

I don't seem them delivering this kind of growth over that time.

Maybe.

Google was able to do it for a long while.

G revenue is growing at the rate of ~20%, while FB is doing >50%. If stock price for FB growth continues, it'll reach Google P/E ratio pretty soon - not 10 years. More like a year.

Facebook has issued 44.22B in common stocks and Zukerberg's personal worth is 50B plus. How does that work? In a way entire common stock is contributing to his wealth.

I personally think a lot of investors will be the suckers in this game in the end.

There are shares outstanding, generally they are 'worth' the same, but with some differences maybe due to voting which affects price a little ...

Most of the companies stock are not 'floating' meaning, they are not out there on the market. So Zuck's shares are not.

The 'share price' is usually just the price of the last transaction of buy/sell on the stock.

If Zuck sold all his shares at once, he mighn't be able to get that price. But he wouldn't anyhow.

There's nothing nefarious about 'others contributing to his wealth' - people are generally buying the floating shares given what they think it's worth.

But here's a trick: if a company has a 'high profile' - often it's shares have some premium simply because there are more people looking at it. Supply and Demand.

Anecdotally, people in my region refer to these services as "Ubers" like "Kleenex" or "Xerox", or refer them as "cars."

1) Moat - barriers for entry in the ride-"sharing" space are low. See Austin for example.

2) Economies of scale - the costs for FB to add each incremental user got increasingly cheaper due to cost savings at scale. Not so much for Uber.

2) Even if Uber's CAC doesn't decrease, it could have a vastly-higher CLV to justify the crazy spending to capture market share now. It's a calculated strategic decision -- and it's impossible to say if it's "wrong"; only time will tell.