As a VP at a major financial services firm in the US, let me make it very plain:
NONE of it adds up. It's all lies, bluster, preening, and a bunch of hot air that keeps the US and UK markets afloat. As long as people are willing to play the game, the juggled balls stay in the air.
At the end of the day, even if a company makes "x" amount of money, corporations in the US change what they actually do very often- they love to take the lions share of money and throw it at the market, or build up (and hide) huge amounts of debt doing so. You really never know what tomorrow is going to look like. And us in the US know that the hard way, after what I'll call the "Great De-correlation" that started during the .com bubble, in which companies balance sheets and real profits started having no real effect of the stock price. Everything became emotional. The CEO farts, and the stock drops. He has a wet dream, it shoots up. It has become worse that Las Vegas. From that point on, it was all crap. Even bank money isn't backed by deposits anymore. The beautiful way that Kenya requires a percentage of deposits to actually exist??? LOL, there isn't even cash in most US banks anymore. Cash? What's that? The market works because noone asks for their money or liquidates their securities... they spend it before they earn it or reap the dividends, so it never has to be paid! Ponzi! The fungibility of the dollar is based on China keeping the purse strings loose, and everyone else in the world's acceptance of it.
Valuation... It's like this Picasso, an original that I asked a senior Financial Services exec about, who shall remain unnamed:
"What's that Picasso in your office worth?"
"Whatever some f***ing fool will pay for it when I sell it."
"So it's really worth..."
"...firesale value. Ink and canvas. Worthless, unless an influential someone thinks otherwise."
Not to say that there aren't good, valuable companies out there, but when they exists, the C-level execs run all the credit up, take home huge bonuses, offshore a bunch of jobs to make the balance sheet look good, and hide debt almost every time. Then, the analysts over-value the company, and you have things like this. Or Enron. Or Worldcom. Or Facebook. But facebook will be fine... because the government pays for that...
Besides, and this is on a serious note, Facebook is simply a way for fools to disclose private information about themselves, their friends, family, and associates, all over the world, with pictures, without a warrant. One of the cats I went to school with is a Senior Linux Engineer over there, and he tells me, and I have verified this, that the CIA pulls all the data over to their own servers, over three OC48s.
The next set of Wikileaks will include pictures from Facebook. 3D models, made from the multiple shots.
Spooky spooky! But that's the way the game is played here.
Hill