Why is Facebook's market cap higher than Lockheed Martin's?

Lockheed Martin makes 3 times the revenue Facebook makes and produces MUCH more sophisticated products. Why do investors value Facebook stock more?

Best Answer:

Stoo: Stock prices are all speculation on future returns. Many stocks are overinflated.

Other answer:

Stoo:
I am guessing there is a larger customer base. Facebook has the potential to earn from individual consumers, whereas Lockheed Martin mainly has government and airline contracts. Just my best guess.
Pork-chop of Doom:
Facebook has more "future potential" as a business than does Lockheed Martin….

Stock prices are a product of what investors are willing to risk as a consequence of their EXPECTATIONS for the future performance of a business….

Leave a Reply

Your email address will not be published. Required fields are marked *