New issue pricing of securities as, for example, the social media, takes lots of imagination, hope and Wall Street hoopla, to go along with its media compliance.
There’s no reason for a new, fresh-behind-the-ears company, with ever-looming competitors, to be selling at astronomical multiples of sales or earnings.
I may be old fashioned: I had a profitable, expanding company selling at 5 times earnings despite 17 years without ever showing an operating loss.
But these are booming times, I guess, and anything goes.
For many on Wall Street, there is a lesson to be learned. In the meantime, a few hands-full of multi-billionaires are being minted literally out of thin air. (See the Earl J Weinreb NewsHole® comments.)
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