Warning for an Eager Facebook Investor (my shortest article, ever!)

Vitaliy Katsenelson's picture


Here is a thought for an eager Facebook investor: Google revenue - $40 billion; market capitalization $200 billion (plus $40 billion of cash).  Facebook revenue $4 billion; market capitalization $100 billion. So Facebook has to grow revenue 10x for you to double your money.  Good luck!

Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo.  He is the author of The Little Book of Sideways Markets (Wiley, December 2010).  To receive Vitaliy’s future articles by email, click here or read his articles here.

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blunderdog's picture

That's ridiculous. 

Revenue has nothing to do with stock prices.

johnjkiii's picture

I'm sorry but GOOG had Rev in 2003 - the year before it went public - of $1.47 Billion and a Market cap of more than $25 Billion. Net earnings were $105.65 Million. It did grow very well but the comparison you use is false & misleading and you get an 'F' in valuation if that's how you conduct your business.