Following LinkedIn's stellar debut on the New York Stock Exchange, which sets the company's market value (as of 1pm ET) around $10.2 billion— more than double the estimated $4.3 billion price during its IPO of $45 per share—many are wondering about the sustainability of the lofty valuations social-networking companies are attracting from investors.
Microsoft, for example, announced last week that it would buy Skype, a voice and video communication company, for $8.5 billion, its largest acquisition ever.
Recent reports have put a price tag on companies like Groupon, which offers discounted deals at restaurants and local outlets, for as much as $25 billion. The company is expected to go public this year. Others, such as Facebook and Twitter, are also valued in the multi-billion range.
Could this be a sign of another dot com bubble similar to the late 1990s?
CNBC.com looked at companies in the S&P Technology sector that have been in existence since at least 2000—surviving the tech bubble—and have posted positive performance in the past ten years.
The average P/E ratio for the tech sector as a whole stands at 28, while the forward P/E is 17.
Flatliners and Underperformers
Among the laggards, below are some of the companies that have underperformed the rest of the group in the past five years. Some of these stocks, however, are experiencing positive momentum in 2011.
Following LinkedIn's stellar debut on the New York Stock Exchange, which sets the company's market value (as of 1pm ET) around $10.2 billion— more than double the estimated $4.3 billion price during its IPO of $45 per share—many are wondering about the sustainability of the lofty valuations social-networking companies are attracting from investors.
Microsoft, for example, announced last week that it would buy Skype, a voice and video communication company, for $8.5 billion, its largest acquisition ever.
Recent reports have put a price tag on companies like Groupon, which offers discounted deals at restaurants and local outlets, for as much as $25 billion. The company is expected to go public this year. Others, such as Facebook and Twitter, are also valued in the multi-billion range.
Could this be a sign of another dot com bubble similar to the late 1990s?
CNBC.com looked at companies in the S&P Technology sector that have been in existence since at least 2000—surviving the tech bubble—and have posted positive performance in the past ten years.
The average P/E ratio for the tech sector as a whole stands at 28, while the forward P/E is 17.
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