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Facebook is valued largely on it's monster market share within social media. Back in 2006-2007 MySpace was valued at over $10B based on those same assumptions. https://www.google.com/search?hl=en&gl=us&tbm=nws&am...Around the same time, Yahoo was massively successful as well and valued at $30 billion, it is now valued at $19 billion.To justify a double, Facebook needs earnings roughly in line with Google's... ten times their current level. For those expecting Facebook to turn into a 5 bagger, they will be the worlds biggest corporation and would need to multiple their earnings by more than 40 to exceed Apple's current $41 billion dollar income.I fully expect Facebook to do just fine, but the way I see it, the underwriters and venture capitalists have captured the vast majority of the growth potential while leaving the current shareholders with all the risks of a company which is still trying to find it's legs.
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