
Wall Street Hates Facebook. No One Knows Why - Libertatea
http://www.wired.com/business/2013/06/wall-street-hates-facebook/
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jussij
> The real question isn’t why Facebook got upgraded, it’s why Wall Street has
> returned to such a bearish position on the social network.

I would have though basic math would answered that question.

When Facebook floated they did not issue all they shares, but instead did a
partial float.

Based on that initial IPO offer and share price (which they got) that gave the
whole company a market cap of about $100 billion.

Now lets assume Facebook could manage a revenue of $5 billion (not the 1.7
mentioned in the article).

Based on that $100 billion valuation that a 5% return on market cap.

Most other companies on the stock market would be returning double or triple
that return on investment.

Consider Microsoft: <http://finance.yahoo.com/q/ks?s=MSFT>

Market cap of $291 billion with revenue of $76 billion.

So unless Facebook can start to pull in some big numbers on the revenue side,
it share price is looking _way_ over priced and the market knows that.

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junto
I am an idiot. I bought at $29.85.

