A friend posted this on FaceBook today.
Zuckerberg now richer than Google founders
A quick Google search showed me that almost all the news papers were running this story (Money Control, Times of India, The Hindu, Business Today etc). It being a lazy Sunday morning I decided to do some math on it and it went as follows
If GSV bought 225k shares at $29.28 that is hardly an investment of 7 million. To say that this implies the company is worth 70 Billion is just a play with numbers. It means that because I bought 0.009% of the company at that price I am willing to pay that much for the full 100%.
Facebook is not publicly traded. So using the premium that someone might have paid to obtain shares can hardly be used to justify the price for the remaining 99.991% of the company.
Anyway, Going further into Price to Earnings ratio's I found that it is now beinghttp://www.blogger.com/img/blank.gif dubbed the Tech Bubble 2.0 since they are trading at a P/E ratio of over 100+ when the average P/E should hover around 20. More details are present at this NASDAQ story
I have to also add that the $2 billion in revenue is again just a estimate. Is it an estimate like the $70 billion worth of the company or is it more solid? I do not know.
With Google+ Being launched, GSV may end up being the poster boy for the slogan there is a sucker born every minute.
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