The Facebook bubble


A massive con job may be in progress in the form of the coming Facebook IPO, which will supposedly value the company somewhere in the vicinity of $75 billion to $100 billion.

From DJ Pangburn of Death and Taxes:

… As I noted in early 2011, all of this smells exactly like another tech bubble to replace the burst housing bubble. The Great Facebook Bubble‘s inflation is absurd. Wall Street banks and investors, as well as Facebook’s numerous stockholders—many of whom are looking to cash out their stocks with the IPO—stand to benefit if they can create the illusion that Facebook is actually worth $100 billion.

The goal is to spread the belief in the illusion such that the valuation reaches its apogee, then falls over time (as all stocks do), by which point the wise investors will have already laughed all the way to the bank. As initial investors that is their right, of course, but it doesn’t mean they didn’t create and sell an illusion in the process…

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2 Responses to The Facebook bubble

  1. Pingback: Grand illusion

  2. pumpkingranola says:

    I think it’s a bubble, as well. The valuation is absurd. Hopefully I can get my hands on a few shares to short..

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