Claims that Facebook is worth $100 billion or even just $65 billion grossly overvalue the company, say researchers who have done a simple calculation of the company's worth. The pair of econophysicists warns that inflated value estimates for sites such as Facebook, Zynga and Twitter are signs that a social networking financial bubble is gaining steam.
"It's not the same volume of the dot-com bubble. That was really widespread," says coauthor Didier Sornette. Nevertheless, he and colleague Peter Cauwels conclude, a social networking bubble — and its impending pop — loom.
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