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    Anonymous

    Diane, 
    The problem with social media is the failure in monetizing the product. If Facebook charged each member $5 to join they would increase gross revenues 60%. Their recently leaked net income of $700 million with a supposedly often quoted 100 billion IPO would put would put their PE ration at 142 to 1. Extremely ugly with extremely little hope of it ever generating an income to justify its market cap. Compare it to Apple with a market cap of 354 billion on net income around 25 billion per year, with a PE ratio just over 13. For Facebook to do that it will have to increase net revenues over 1000%. I certainly wouldn’t take the gamble and anyone doing other than trend following would never buy the stock. And the trend may not be that great when the IPO occurs ….. With all due respect, their inability to monetize vs ability to hype are what make these dangerous. While they may not go to zero like so many of the dot bombs did, they aren’t worth what anyone is claiming they are. Its a great sales job on a gullible public to buy the IPO so the insiders can get rich. 

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