| OK so I'm not a finance guy at all, but can you explain what I'm not getting: http://www.google.com/finance?q=NYSE%3ALNKD&fstype=ii 363M revenue. Minus a ton of things for operating income of 8M. Then tax brings it to 3.7M. On what basis are we supposed to think LinkedIn is suddenly going to eliminate > $300M of quarterly costs? If you do the "1 times revenue" (so about 1BN) that's still not close to being worth 32B. I asked the same things when I was 18 in the dot-com boom and got hand-wavy responses and people talking about eyeballs and stuff. Why is this fundamentally different? I understand if it's too much to explain in a comment, but could you link to some introduction that explains why a company's costs should be ignored? Also, why the stock would go up when they meet expectations? If you bought into the high P/E at $100 on the logic of "yeah the PE is high, but it's growing into it" then you'd expect the PE to lower as they meet their goals. Instead the PE stays around the same area and the stock goes up. That does not sound rational. Edit: Like, 1% profit margin, so even if they magically multiply that by 10 or 20 times, that'd still mean a PE in the hundreds. |