A company valued at $100 billion with only $700 million in revenues is the definition of overvalued and was a big red flag from day one. In theory, FB
should have gone public several years ago at a much lower valuation and allow market demand to push the market cap higher. However, the fact that they didn't also raises another red flag.
I think FB
and Wall Street purposely kept the company private and allowed public hype artificially drive the market cap higher. I think they did this because they knew if they had gone public a couple years earlier, the market cap would never have reached $100B. The revenue and growth would never have supported a market cap of $100B.
Once the company went public at this artificially inflated market cap, all of the main investors pulled their money out, thus resulting in the FB
It was a clever strategy, though it severely hurt those who were gullible enough to fall for the hype. The problem now is that the stock will over-correct (go below fair value), before it rebounds. It will take time to change the perception that the stock is overvalued.
As far as the mobile advertisement issue, that is not an insurmountable obstacle. This can be easily addressed. But I think the stock will still be overvalued even after this issue is fixed.