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!@#$%! · 05.23.2012, 12:24 PM

yah but the question is not if FB is profitable-- it made a billion bucks profit last year, so of course it's profitable.

the question is whether the profits are large enough to justify the $104 billion market valuation. (giving you a P/E ratio of over 100, whereas google is at 18.5 or so-- their profit last year was $9.6 billion)

the market's answer so far is "no", and the price keeps dropping (barely above $31 right now) and it will keep dropping until it finds its right level-- which is somewhere nobody yet knows, but nobody reasonable expects it to crash into nothingness-- just to find its correct level.

and flottibags is of course right--people not clicking the ads simply limit the value of the ads. you can spin that 100 ways to sunday but the basic fact is that people don't click FB ads. so-- how far can profits increase and share price decrease to make this a good stock? prolly when it approaches a similar P/E ratio as google.

and the there is still the issue of trusting zuckerberg not to run the thing into the ground. fortunately for investors the other 2 top execs seem saner:
http://newsroom.fb.com/content/defau...x?NewsAreaId=1
however, if this bloated IPO is a sign of how things are run at FB, in my mind it's still a no buy.

05.23.2012, 12:24 PM	#28
!@#$%! invito al cielo Join Date: Mar 2006 Location: mars attacks Posts: 42,704	yah but the question is not if FB is profitable-- it made a billion bucks profit last year, so of course it's profitable. the question is whether the profits are large enough to justify the $104 billion market valuation. (giving you a P/E ratio of over 100, whereas google is at 18.5 or so-- their profit last year was $9.6 billion) the market's answer so far is "no", and the price keeps dropping (barely above $31 right now) and it will keep dropping until it finds its right level-- which is somewhere nobody yet knows, but nobody reasonable expects it to crash into nothingness-- just to find its correct level. and flottibags is of course right--people not clicking the ads simply limit the value of the ads. you can spin that 100 ways to sunday but the basic fact is that people don't click FB ads. so-- how far can profits increase and share price decrease to make this a good stock? prolly when it approaches a similar P/E ratio as google. and the there is still the issue of trusting zuckerberg not to run the thing into the ground. fortunately for investors the other 2 top execs seem saner: http://newsroom.fb.com/content/defau...x?NewsAreaId=1 however, if this bloated IPO is a sign of how things are run at FB, in my mind it's still a no buy.
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