Calling the DotCom Boom 2.0

Grauniad remembering nothing and forgetting nothing from the DotCom boom methinks:

Facebook is now being valued at more than $33bn (£21.3bn) as investors try to secure a stake in the social networking site in anticipation of its flotation on the US stock market.

The latest data shows that shares in Facebook are changing hands for up to $76 each, more than double their value at the start of this year. While Facebook is still privately held, shareholders are able to sell the company's stock through "secondary market" trading.

By buying at these prices, some investors are calculating that Facebook is worth more than eBay or Dell, or nearly twice as much as Yahoo!.

Secondary market trading can artificially inflate the value of a private company, as the relative scarcity of its shares may encourage a buyer to overpay.

In essence the article is somewhat like a cigarette ad - warning you that this stuff can seriously damage your wealth, while nonetheless pumping up the value. But those of less tender years will have seen all this before in the DotCom boom. And here it comes again:

Forgetting Nothing - that very small amounts of illiquid shares trade at stupid prices above real value.

Remembering nothing - that very small amounts of illiquid shares trade at stupid prices above real value.

Another snippet readers may want to look at relating to this - some, ahem, "assertively entrepreneurial" companies see this as a marvellous opportunity to add value in a way that bankers call "arbitrage"

Here we go again, time to throw the pensions into the bonfire of the vanities - and the meedja is leading the charge?. But in The Old Days you got pre-flotation shares at pre-flotation prices, not at a secondary market price driven by scarcity and speculation. Another notch on the post for flat earth news it would seem perhaps? Those who cannot remember the past......

Last time round Netscape's IPO started it all off. On the strength of this, guess who we're tipping this time.