[joelrunyon]

Groupon Zynga

Is anyone paying attention? Just because a company has a massive user base, big popularity, and lots of VCs, doesn't mean it has a great business model.

Sure,you can buy shares, watch them triple in the first 24 and dump them, but when the dust settles, what really happens?

Groupon is trading at $20.04. It IPO'd at $20. Zynga is trading at $10.05. It IPO'd at $10.

Good for the VC's, finally getting a return on their money and all, but it doesn't seem that the companies are really doing much to deserve the hype.

Facebook is presumably making money, and has a crap-load of user-data, but 100 Billion dollar valuation? Maybe based on what people are willing to pay for it, in the hype to get some of it's stock, but its revenues were 2.5 Billion last year. A valuation that's 50x their revenues seems a little steep to me - but again, that could just be me.

[3pt14159]

If that scares you look at sales force 5500 p/e and a 15B valuation. For SaaS software.

Insanity.

(Disclaimer, I have a vested interest in this stock going down.)

[spitfire]

I had never looked at sales forces' P/E before. It's at 7700 right now. Insanity.

[pwaring]

It is a daft valuation - for $100bn you could buy the big three quoted supermarkets in the UK (Sainsbury's, Tesco and Morrisons) and control 50% of a market whose main product (food) is a necessity. Or you could do the same in retail banking, again a necessity in the modern world.

Or you could buy Facebook, with $2-3bn in revenue and a big database of users which they haven't really worked out how to monetise yet.