LinkedIn earned $16M last year. It's valued at $8.9B. You crazy enough to ride that train?

Joe Nocera asked whether LinkedIn was scammed by Morgan Stanley during it's IPO. The bank priced the IPO at around $45-48, paying the company a percentage of that valuation. The stock opened north of $90, which is where the bank sold it, netting the bank 100% profit immediately, plus filing fees, etc.

Likely true. Thing is, is LinkedIn (LNKD) worth $93 (where it stands right now)? Let me put it in perspective for you: it's price to earnings ratio (PE or the stick price * total shares / what you earned) is 561. The company earned $16M last year. The valuation has it at over $8.9B. Yahoo has those earnings even lower, putting the P/E at 1412.

Other prominent companies' P/E ratios:
AAPL - Apple - 15.95
GSK - GlaxoSmithKline - 37.48

Other brand new IPOs' P/E ratios:
WIFI - Boingo Wireless - 19.68 (Nice ticker symbol btw)
GNC - GNC Stores - 21.55

(ZIP - ZipCar had an IPO, but has not yet reported any earnings so P/E is not available.)

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