Why do people buy FB if its price isn't justified by P/E?

[icpooreman]

PE shouldn't be the only number you look at as it can be manipulated by various factors. EG 4 quarters ago fb made like 0 profit because of an acquisition so next quarter this PE ratio will drop significantly if fb has even a normal or sub-normal quarter profit wise. Look at chinese solar stocks a few years ago. They had great PE due to manipulation of how they do accounting meanwhile their stocks all plummeted and many big companies started going bankrupt.

Even so companies expected to grow fast can justify a higher PE because that number can change significantly. If FB figures out a way to get most users to give them 5 dollars a year they're significantly undervalued and the PE becomes a low number overnight.

On top of that the market isn't always rational. Many people don't have that view of investing and stocks will go a lot higher than even Facebook has gotten with regards to PE.