Facebook IPO - overvalued?

[Southie]

Re: Facebook IPO - overvalued?

@Southie

Had a senior moment. I just saw the date of op. As Feb 1. And assumed 2014. This thread opened 2012. Snp500 closed at 1324. Now 1994. So 670 gain. Or 50.8 pct gain. Add 1.3 pct yield. Total return is 52.1 pct. While fb returned 100 pct in same time frame. Still much better than mkt. But margin not as wide as I thought.

The Snp500 is exactly at 1994. And FB exactly at 76

Your Arithmetic is bit off. SNP div yield.has been at 2 pct. So in 3 years, add 6 pct. So total return 50.8 plus 6 or 57 pct.

Facebook total return 100 pct. So yes, in 3 years FB at IPO price has outperformed snp500.

For every such tech IPO there are several that go bust. The market has rip roared in last 6 years. So high fliers will fly high. The moment of reckoning will come when markets tank.