Facebook PE of 1775 how does this make sense?

Discussion in 'Stocks' started by noob_trad3r, Apr 25, 2013.

  1. Curious paying 1,775 times earnings for a company that does not seem to have such earnings growth future.

    Is the math wrong or why is trading for such a high p/e? What am I missing.

    All companies at such lofty P/Es always crater 4 years down the line.
  2. Bolts


    Very small E results in a very large P/E. Imagine if they had zero earnings. The P/E would be infinity! :eek: :p It just demonstrates one of the flaws of P/E ratios. Not that I would buy any FB.
  3. The beauty with all these social networking sites like fb is some 12-year old genius kid can one day write some code and develop a new fb that's times better. People abandon old fb in droves and its value becomes nothing.

    It happened before with Myspace and News Corp lost millions. Zuker is a smart man though, went IPO and sold to all the suckers at the very top.
  4. I wouldn’t touch FB either with a 10 foot pole. I guarantee you in 10 years there are going to be a lot of angry suckers who are left holding the bag. Facebook is popular but not financially viable enough as a company.
  5. there are good stocks and good companies. learning to know the difference is the wisdom and not becoming an "involuntary investor" matters.