Ashby's Answers: Another tech bubble?

ASHBY'S ANSWERS

So Facebook is now valued at $50bn, at least based on the price recently paid by Goldman Sachs' wealthy clients in what appears to be a rather expensive pre-IPO game of spoof.

This is for a business which reportedly achieves just $2bn of revenues - so a multiple of 25x current sales, or $100 for each of Facebook's 500m users. Similarly, ARM Holdings, one of the few UK technology stocks still in the FTSE 100 Index following the bursting of the dot com bubble, is now capitalised at £6.1bn ($9.4bn). Based in Cambridge, ARM is the world's leading semiconductor intellectual property (IP) supplier and its designs are at the heart of the development of many digital electronic products. ARM currently achieves estimated revenues of £400m which, after deducting £2...