Dot Bomb 2.0

while i'm in no way an economist, the sentiment of hype and overvaluation does make sense to me.
especially where social networks were being comapred to big fmcg, their comparative value makes no sense imo.
 
I totally agree that the price-tags are unrealistically over the top, but I think the analysts are thumb-sucking based on how much they think multi-billion corporations would pay and not what the .com apple of their eye on a particular day is really worth in terms of what it does, customers and other assets it might have, as well as debt and projected future earnings.
 
Follow the money. If Goldman Sachs are involved it's a scam and sooner or later the whole thing will implode (and they'll cream off obscene profits in the process).

Goldman Sachs raised the $5 Billion that valued Facebook at $50 Billion. Does GS think FB is worth $50 (and now 80) Billion? Of course not. Not that it matters to them; They know they can make sure they get out just before they unload what they hold on unsuspecting investors who trust them (aka gullible greedy morons and pensioners), take massive short positions on the stocks and watch the market implode while they pick out fittings for their new yachts.

It's been their business model for nearly a century and made them more money than god, why would they do things differently now?

Usually I'm strongly opposed to capital punishment but in the case of GS I think we should re-introduce public floggings and feeding people to the lions.
 
Goldman Sachs will just get a tax-sponsored "bailout" if they lose. Privatized profits, socialized losses.
 
Aztech said:
Follow the money. If Goldman Sachs are involved it's a scam and sooner or later the whole thing will implode (and they'll cream off obscene profits in the process).

Goldman Sachs raised the $5 Billion that valued Facebook at $50 Billion. Does GS think FB is worth $50 (and now 80) Billion? Of course not. Not that it matters to them; They know they can make sure they get out just before they unload what they hold on unsuspecting investors who trust them (aka gullible greedy morons and pensioners), take massive short positions on the stocks and watch the market implode while they pick out fittings for their new yachts.

It's been their business model for nearly a century and made them more money than god, why would they do things differently now?

Usually I'm strongly opposed to capital punishment but in the case of GS I think we should re-introduce public floggings and feeding people to the lions.
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Well expressed. I fear you could well be right.
 
Well, if they are purely valued because of their expected future earnings, well then they might just be worth that kind of money.

I think its not a case of a bubble, rather a case of can they stay current and continue to make most people log on to Facebook every day. Does Disney make us watch a Disney movie everyday?

Despite that, there are always risks involved in the I.T. sector. If for some reason some event causes people to suddenly stop using facebook, well then you will obviously see a massive decline in their value.

It could just be that people tend to overestimate Facebook's life. We can look at Myspace as some sort of example. Myspace was the coolest thing since Cola and airconditioning. In that case they might be completely overvalued. Nobody knows, the brave put a price to it or use other's money to put a price on it (not so brave). The rest will sit on the sideline and watch others make or lose money.

If it is a bubble, well then there is money to be made. The question is are you brave enough to short Facebook? :)
 
The entire US economy is so badly in debt that a bubble like this is nothing more than a little distraction.
 
inferno said:
The entire US economy is so badly in debt that a bubble like this is nothing more than a little distraction.
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Problem is when that bubble goes we all going to feel the effect. Governments can only use so much tax money to keep the economy going, once you hit the limit its going to end up badly for all of us.
 
Great recession eh

Was it really?

Take unemployment. The U.S unemployment is at 8.7% for the last 2 years it's been above 8.5% disaster right? Yet the E.U has only ever been under 8% for 2 of the last 11 years. I dunno I find it hard to believe it's been this total meltdown as if it's the 30s all over again.

Perhaps it's the show I watched on BBC this morning about Spain's predicament and they were interviewing hard-done-by unemployed "young people" about their plight while dressed in the latest fashion, sipping cappuccinos in trendy cafes.
 
As stated in the opening sentences, its hard to answer this question truthfully. From an (also) investor perspective it is nice to scoop up some profits during such bubble - as long as one can "read" the duration of the bubble and manage to time "getting out" without getting over greedy.
 
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