Re:Report: Facebook IPO in early 2012, for $100 billion+
by Retric on Monday June 13, 2011 @07:37PM
(#2651171)
Based on a sane P/E and assuming strong revenue growth and minimal risk Facebook should sit around 1/15th of a Microsoft. If they can hit 10billion / year in revenue in 3-5 years they might be worth ~1/3 of Microsoft but IMO anyone buying Facebook at 100billion is an idiot or banking on the greater fool theory when there are not all that many fools left.
PS: IMO, the odds Facebook will be worth 400 billion in 5 years is much worse than the chances it will be worth less than 25 billion in 5 years. Buying a sock with no dividends in sight, a strong chance of losing 75+% of it's value and little real room for growth is a poor long term prospect. In the short term day traders may be irrational but the market is a fickle beast and can turn on a company vary quickly.
PS: IMO, the odds Facebook will be worth 400 billion in 5 years is much worse than the chances it will be worth less than 25 billion in 5 years. Buying a sock with no dividends in sight, a strong chance of losing 75+% of it's value and little real room for growth is a poor long term prospect. In the short term day traders may be irrational but the market is a fickle beast and can turn on a company vary quickly.