Can you say bubble?
Infographic: What the Largest Social Media Companies Are Worth
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In 2010, LinkedIn made about $200 million in sales. In 2011, its stock price suggests a market cap of $9 billion. Trading at 45 times its revenue makes LinkedIn the highest price-revenue ratio of any stock in the world, said Espen Robak, president of the firm Pluris Valuation Advisors.
The rest of the social media brat pack is on the cusp of going public. Zynga's IPO could be weeks away. Facebook is expecting a $100 billion valuation by IPO in 2012. What kind of wild valuation multiples could we see from the next batch of upstarts? The cool chart below* answers that question. The upshot: Of the companies earning revenue, Twitter has the highest current revenue-valuation ratio.
http://cdn.theatlantic.com/static/mt/assets/what-were-reading/GLG-TECHBUBBLE_Infographic.png
The rest of the social media brat pack is on the cusp of going public. Zynga's IPO could be weeks away. Facebook is expecting a $100 billion valuation by IPO in 2012. What kind of wild valuation multiples could we see from the next batch of upstarts? The cool chart below* answers that question. The upshot: Of the companies earning revenue, Twitter has the highest current revenue-valuation ratio.
http://cdn.theatlantic.com/static/mt/assets/what-were-reading/GLG-TECHBUBBLE_Infographic.png
* To answer the question posed by the chart (Is there a tech bubble?) the best answer is: This chart doesn't have the answer. Investors are willing to pay the prices they're paying for private and public stock either because they believe they can get their money out before the market realizes there is a bubble (a risky strategy) or because they really think that these companies will grow quickly and eventually settle at mundane multiples, like Google and Microsoft. Graph courtesy of Gplus.
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