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The Companies Worth Less Than Facebook

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Re: The Companies Worth Less Than Facebook

#7
post #6

Wow... neat list. FB is not more valuable than BMW, AIG or Nokia. There's just no way. And if it turns out that they are, then something is fundamentally wrong.

Why? I barely use facebook and it's more important to me than BMW or Nokia, and AIG should be out of business (but that's another argument). I assume facebook is more important to most people than BMW or Nokia, and though the value may be less per person it could be easily be more in aggregate.

Re: The Companies Worth Less Than Facebook

#8
It's important to note that stock valuations are derived from the expected future profitability of a company. Stock is a claim on future profits. Compared to a company like Halliburton, who has to build billion-dollar oil rigs before they make any profit, a technology company like Facebook is a lot more lucrative and thus its stock can inflate quickly if the profits expand faster than costs. And generally technology costs go down over time while profits increase exponentially. So you have a powder-keg scenario in Facebook if, and only if, they find a profitable business model based on their enormous userbase. And they better find that business model or the stock will crash like it's the year 2000.

Re: The Companies Worth Less Than Facebook

#10
post #6

Wow... neat list. FB is not more valuable than BMW, AIG or Nokia. There's just no way. And if it turns out that they are, then something is fundamentally wrong.

Why? I barely use facebook and it's more important to me than BMW or Nokia, and AIG should be out of business (but that's another argument). I assume facebook is more important to most people than BMW or Nokia, and though the value may be less per person it could be easily be more in aggregate.

I would think that hundreds of years of engineering (mechanical and electrical) and solid products used all across the globe would be more valuable than a social website, but maybe I'm wrong.
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