graeme_p - 5:46 am on Feb 3, 2012 (gmt 0)
Zuckerberg is smart: he is cashing in while expectations are high. Just like the founder of MySpace who shafted Murdoch.
The last time I saw valuations this high was during the dotcom boom.
@Sqt_kickaxe, you misunderstood that. The IPO values the company at $120 per user: they need to charge advertisers enough to make a reasonable return on that - a profit of, say, $6 per user would do if it was growing (5% return).
The problem is that FB is a long way off from that level of profit. A historical PE of 100x. Looking at it another way, they need to make about 5 times the profit they did last year within the next few years to provide a better return than some fairly safe investments.
They do have room for growth, but that much?