[quote=AN][quote=livinincali]
QCOM in 1999 had a market cap of about 75 billion and annual revenues of about 4 billion. So there price to revenue was 18.75. FB has a market cap of 167 billion and revenues of roughly 10 billion = 16.7 price to revenue. TWTR is 23 billion market with revenue projected to be about 1 billion = 23.0 price to revenue. So in valuation terms FB and TWTR are pretty close to where QCOM was at the peak of the 1999 bubble. TWTR is higher, FB is slightly lower. The biggest difference is when they IPO QCOM was a IPO well before the bubble FB and TWTR have both IPOed somewhere in the middle of this bubble.[/quote]
QCOM is just one of those company I listed. There are many many more. How about INTC that went up 200% between 1998 to 2000, MSFT went up 150% between 98-2000, AMD went up 400% between 99-2000. Then there are the huge number of .com that are now completely delisted, like VerticalNet, Ariba, and other B2B, B2C companies. You can almost just throw a dart at a dart board with sticker symbols and you’d make a HUGE gain in spand of a few months.
That’s just looking at the stock market over the 1-2 years before it popped. If you look at the longer range of 1995-2000, MSFT went up 1400%, INTC went up 1000%, QCOM went up 5300%, JDSU went up 18000%, etc. Even from the depth of the recession in 2008, these companies have only gone up 50-200%. Get back to me when FB or TWTR went up 18k%. I’ll be kind and say, if FB and TWTR can gain 1000% over 5 years like INTC did, then I would say it’s a bubble.[/quote]
For the private equity investors in FB before it went public they probably did have thousands of percent returns. Tech companies these days aren’t going public as early as they did in the past. Goldman Sacs probably has tons FB stock that translates to a dollar or less when they were early investors.
It’s the valuation that matters not how much something has gone up. It’s it a bubble if the valuation doesn’t make any sense. Not whether it went up 1000% or 100%.
Look at CYNK. It has no revenue. It’s based in Belize with want I can tell is one employee and it’s gone from 0.06 to 9.74 in less than a month. That’s only a 16100% percent return.
I know the stock market is in a bubble. I do not know when it’s going to pop. I fully expect most people to fail to exit at or near the top even though they all think they’re smart enough to get out at the top. It’s just the nature of a bubble. If you think you’ll know the exit point is when TWTR goes up 1000% good luck. I doubt that’s going to be the signal for the top this time around.
