BLOODBATH: Watch Facebook Investors Panic to New Lows [View all]

[Mosby]

Facebook’s (NASDAQ:FB) stock has some serious troubles. Facebook was supposed to be the biggest IPO of the current market cycle, but it’s quickly becoming the fastest way to lose money. The stock crashed over 9% yesterday and is already starting the day with more sellers lined up than buyers. This is becoming one of the worst twists for what’s been a story-book business to pre-IPO.

Only one question remains in the short term: how low can Facebook go?

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If we slap Google’s (NASDAQ:GOOG) 7x revs multiple at its IPO onto Facebook, Facebook will land at $19. If we start cutting into the lofty P/E ratio on justified issues over slowing growth, and slap on a still nosebleed 50 PE, we get $19.50. You can buy Google’s earnings for 18x and Apple’s (NASDAQ:AAPL) for 14x while still getting great growth. So today’s current 75x for Facebook seems, well, financially illiterate.

http://wallstcheatsheet.com/stocks/bloodbath-watch-facebook-investors-panic-now.html/