Even At $21, Facebook Is Still Overpriced

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		Tech Science Entertainment Wall Street Markets Strategy Sports Lifestyle Politics Law International Video Latest Wednesday, August 8, 2012 Even At $21, Facebook Is Still Overpriced Facebook's stock has crashed since it was priced at $38 for its IPO. It's trading at $21 a share right now. If all the smart institutional investors were willing to dive in at $38 a share, then at $21 a share it has to be a screaming buy, right? Not necessarily. The stock is still overvalued, argues our own Henry Blodget. He compared Facebook's PE ratio based on 2013 earnings estimates to Amazon's, Google's, Apple's, and a few other tech companies. As you can see, Facebook's PE ratio is higher everyone other than LinkedIn and Amazon. That makes sense, because Facebook is a young, growing company, right? Wrong again! Facebook's growth is decelerating, its business appears to be maturing, the transition to mobile is hurting it, and profit margins are shrinking, says Blodget. For those reasons, you can argue Facebook is still overpriced. (But what about Amazon and LinkedIn? Amazon's earnings have been knocked down as it invests to boost sales. Down the road, Amazon's earnings growth is expected to return. As for LinkedIn, it is growing like a weed compared to Facebook.) Follow the Chart Of The Day on Twitter: @chartoftheday Read » Also On SAI Today: BII REPORT: Why Square Is Winning The Mobile Payments Race Square Has A New Competitor, GoPago, And It's Backed By The Same Investor BOOM! Square Just Roughly Doubled Its Business Overnight All Of A Sudden, Two Of The Hottest Payments Startups Are Actually Competing With Each Other Advertisement CHART OF THE DAY: This Is How Most App Makers Are Making Money CHART OF THE DAY: Apple And Samsung Swallow All The Smartphone Industry's Profits And Then Some CHART OF THE DAY: A Tale Of Two Social Networks Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the SAI RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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