| I admit I don't fully understand financial analysis, so I don't understand how he got to $10. However I do know math and I figure I could do a reasonable comparison of stock prices. What I wanted was an apples to apples comparison between FB and GOOG. To do this I figured out what FB's price should be if it were valued like GOOG. What I needed to know were the number of shares outstanding, the current stock price, and their revenues. A simple lookup gives me the first two items, and I have the last one from the article itself. To get the values in terms of revenues, I multiplied the number of stock outstanding with the stock price, and then divided by the revenue. This gets me the stock to revenue ratio of GOOG. Shares * Price
-------------- = Stock to Revenue ratio
Revenue
GOOG's equation looks something like this: 326M * 613 / 36.5B ~= 5.475 S:RKnowing this, I can now start calulating FB's ratio and solve for it's stock price. 2140M * FBStockPrice / 3.71B = 0.576 * FBStockPrice Solving for FBStockPrice... 0.576 * FBStockPrice = 5.475, FBStockPrice = 9.4917 Refs: [GOOG]: https://www.google.com/finance?client=ob&q=NASDAQ:GOOG [FB]: https://www.google.com/finance?client=ob&q=NASDAQ:FB TL;DR: This doesn't mean anything. I just like math. |