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No. of Recommendations: 4
But before I reply to the bulk of your post, just so we're going apples-apples quantitatively, where are you getting your data? I use finance.google.com, which says FB has 2.14B shares outstanding (not the 2.7B your EPS figure implies), and their EPS is listed as $0.18. P/E is right around 100.

There is a lot of confusion about one very important metric for Facebook--the number of shares of stock that are outstanding. ...
Google Finance says exactly the same thing.
And so do many other sources.
This is incorrect.
...
Meanwhile, Wall Street analysts are all over the map. Some analysts are using share counts for Facebook that are under 2 billion. Others are using the same counts as Yahoo and Google: 2.1-2.2 billion. Still others are using the correct share count (per the company) of about 2.74 billion.
The disparity of share counts was making me crazy, so I double-checked with the company today. Facebook confirmed that the correct share count is about 2.74 billion.

http://www.businessinsider.com/facebook-shares-outstanding-2...

Facebook earnings are a little dicier, and frankly, a crapshoot. Still, here we go:

Reported earnings were minus 8 cents a share, which is what most of the financial sites will show. But most of the loss was one time expenses involved with the IPO, without which earnings would have been positive 12 cents a share.

That translates to $328,000,000 on revenues of $1.2 billion. (Not a bad margin, eh?) Quick and dirty, multiply by 4 (quarters), equals $1.3 billion.

Now. There are lots of ifs and buts and candies and nuts in here. I'm assuming that this quarter was typical. (Actually not, I expect their revenue to grow over time, don't you?) I also assume they won't have a lot of these "one time" charges, or at least they won't be so large as to be meaningful. I know, I know, assume = ...

Do the math backwards, after a year (ridiculous to project forward based on one quarter, but then we don't have much else, do we?), drop the share price by another $5, I get a P/E of mid-twenties. (Feel free to check my math; this is all in my head) Still high, but not absurdly high as these sorts of speculative things go. I see Facebook as having a far more durable business model than Groupon (for instance), for which I can find no barrier to entry except "we're here and we're big", but with no network effect as Facebook has. I don't see it in the gaming business, which is hit driven (and may or may not "hit".) I don't see it in lots of other spaces around "internet", but I do see that Facebook - even a Facebook where the user uptake is decelerating, still has put more eyeballs in front of a screen than CBS, NBC, ABC combined at some times. That has to be worth something, doesn't it?

I find them wanting in the execution of the advertising business, frankly it's been poor (to be kind), but then new media often has that trouble. AOL did, Yahoo did. Google did. Even the Yellow Pages and Newspapers and Radio didn't know what they had for several years after the birth of their industry. I anticipate that they will get that straightened out; if they don't, shame on them.

Hovering over the horizon are the three further lock-up expirys, two in October and one next year, I think. (Not sure about the exact dates.) And the continuing bad PR thyeir hamfisted moves have engendered: everything from the blown IPO to the continuing "privacy" issues which they seem so cavalier about.

But anyway, I think they are getting into "interesting" territory these days, something I would not have said two months or even 30 days ago.
 
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