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When Google went IPO their valuation hovered around 30B, compare that to Facebooks 3 times that, now nearing 90-100B in the private markets. Companies are stayi
by arturnt 15y ago
When Google went IPO their valuation hovered around 30B, compare that to Facebooks 3 times that, now nearing 90-100B in the private markets. Companies are staying the private markets a lot longer so by the time they hit the public market they are already overvalued/valued appropriately. I doubt Facebook will see exponential growth initially until they have healthier profit numbers. Unless a lot of amateur investors buy it because they saw The Social Network.
- CyrusL 15y agoIt doesn't even require a lot of amateur investors to drive it up beyond reason, just the belief that there will be a lot of amateur investors. Who cares if I paid a stupid price if I can sell to them at a stupider price? Some people call this the "Greater Fool Theory." http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Keynesian_beauty_contest http://en.wikipedia.org/wiki/Keynesian_beauty_contest