> If you are an investor, stop trying to explain price movements on social media companies, using traditional metrics – revenues, operating margins and risk.<p>This just seems goofy to me. If you're an investor, isn't that <i>exactly</i> what you're supposed to base it on? After all, you're investing dollars into the company (presumably). It seems a dangerous game of chicken, because people don't put their money into a stock just to watch them get more users, they do it to eventually get more money back. To me, that's done in 2 ways: if the company actually makes enough money and gives a dividend, or secondly by selling to a 'greater sucker'. If you ignore "traditional metrics", aren't you betting on the 2nd one?<p>And even if we <i>do</i> that, FB can really "only" grow their user base by ~5.5 times. Beyond that, you <i>have</i> to look at things like revenues, operating margins and risk, don't you? I understand that when FB was at 10 million people they were growing extremely quickly, so their valuation was probably crazy high, but how much growth can FB really have anymore? Now that they're public, isn't that supposed to be the time when revenues, operating margins and risk actually kick in?<p>For the record, this is exactly why I don't invest in social media stocks--I don't understand it. It might make sense to someone else, but not to me (yet, anyways).