[ryanatkn]

No, revenue. For example Google's P/E (the equivalent profit ratio) is currently 31.4, and that's not including the control premium.

[wise_young_man]

Comparing the cost multiple for a private company's acquisition to a P/E ratio of a public stock is way different and not really a fair comparison.

[mason55]

Generally the starting point for any tech acquisition is 3x - 5x revenue multiplier. Occulus is hardware so their margins are lower than software, pushing them closer to the 3x mark.

[ryanatkn]

It's far from precise but I'd maintain it's useful to illustrate that if Oculus is a success, Facebook made a great buy.