The Facebook market cap slid by 30% in one week. That is probably the biggest loss of an IPO right after the offering. If the IPO is worth $l00 billion, then that is a whopping $30 billion loss; it is not chicken feed or peanuts. That is a lot lot bigger than the $2billion trading loss of JP Morgan.
It is a mea culpa for those who went ahead buying FB stock. It was a popular, trending social media, but with no real solid business model and cash flows. It was, just like the idea it was promoting, highly socialized; but business wise.....
All that glitters and/or popular is not gold...
This is the reason why the IPO bombed out. The numbers, the financials will set you free. The revenues and the Gross Profit are not that high to justify the high market cap. The net income would not even amount to $lbillion per year. It would take more than l00 years for investors to have their ROE. The PE ratio is simply too high
