It _is_ a simple issue of "extrapolation".
(whether the stock is over-priced is a separate issue).
I agree, but that's not how "extrapolation" should work.
Considering how kick-ass and promising Google was before its IPO and what Facebook is right now, it's clearly an overpriced company, especially in the context of the current economic recession which is far from over and might even bring further surprises down the road (Greece, Spain, Portugal defaulting, etc...)
Based on this valuation, Facebook (pre-IPO) right now is in the same league as Google and Apple, which is absurd.
Of course, markets aren't always rational. That's why we have bubbles and economic recessions. What can I say; most people dream about investing $1 and getting $3000 back.
Considering how kick-ass and promising Google was before its IPO and what Facebook is right now, it's clearly an overpriced company, especially in the context of the current economic recession which is far from over and might even bring further surprises down the road (Greece, Spain, Portugal defaulting, etc...)
Based on this valuation, Facebook (pre-IPO) right now is in the same league as Google and Apple, which is absurd.
Of course, markets aren't always rational. That's why we have bubbles and economic recessions. What can I say; most people dream about investing $1 and getting $3000 back.