The Presence of Facebook is Very Real | Exploring Markets

The Presence of Facebook is Very Real

It is easy to be a skeptic of Facebook. With a market cap of 65 billion dollars and a P/E ratio 1,855 the stock appears overvalued.

It is key to remember, however, what Facebook is and where it stands in history.

Social is barely 5 years old.

The market prices stocks in future terms.  It discounts cash expected in the future to arrive at a current price. P/E ratios are largely based on lagging data – that is results and metrics from the past earnings reports and such.

Sit for a second and ask: Where could Facebook be in 10 years?

Think of all the possibilities, and how easily it can be achieved:

1.) Facebook Search – dethrone Google
2.) Facebook Shopping – dethrone Amazon
3.) Facebook Mobile OS – dethrone Apple
4.) Facebook Cloud - dethrone Rackspace

Those are 4 example we conjured up on the fly, in roughly 30 seconds. You see now?