I know zippo about what's going on with aD, but --
Just a minor correction for Todd -- when doing P/E analysis, it's important that a company have (E)arnings. Not to be confused with revenue. Companies running at a loss don't.
That's what made internet valuations during the bubble even stupider -- people were focusing on revenue generation (as a proxy for market dominance, and therefore value, i guess??), instead of earnings.
Now that the markets have come to their senses, and people are questioning sketchy earnings reports even from companies that _do_ make money (http://news.cnet.com/news/0-1007-200-6318759.html), attempting to figure out the value of a venture-backed, but private internet startup that's still burning cash has become an exercise in pain for existing shareholders.
Companies that received their funding at the height of the bubble and now need to go back for more cash are finding their valuations slashed.
This means that for a given amount of new $$$ invested, the existing owners will have to give up a greater % ownership of the firm. Existing owners get "diluted".
In VC parlance, this is called a "down round", and is good for new investors who can invest at firesale prices. It's very, very bad for existing owners, or people who are trying to sell their shares. (http://biz.yahoo.com/bizwk/010501/8tx1fo4d6cz93wm2gikhfw.html)
So, I can't say what's going on specifically at aD with respect to valuation, but I can't imagine that they are immune to the shifting fortunes of the marketplace. [After doing some VC work for the past couple of months, I can tell you that it's getting pretty ugly out here.]
The bottom line is that the valuation of a private firm is always a negotiation between buyer and seller; there's no cut-and-dry number. So i wouldn't even try to speculate on what's happened at aD.
