Private investors stick to a Facebook (FB) valuation of close to $100B, according to new trading...

Private investors stick to a Facebook (FB) valuation of close to $100B, according to new trading data released from Sharespost. Facebook shares traded at $40 a pop - compared to a $34 share price from a previous auction completed on Jan. 24 before the firm filed its S-1 with the SEC.

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Comments (16)
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
    100x earnings and the Zuckerman retains 51%. Flip it quick or watch it dip?
    4 Feb 2012, 09:54 AM Reply Like
  • Mark Campbell
    , contributor
    Comments (45) | Send Message
    I can't believe anyone thinks facebook is worth so much. It only made 1B last year. Its revenue is entirely dependent upon advertising. They have about 1 billion users and I doubt that number will increase very much in the future. Some people like me aren't going to join and a substantial number of people in the world who live in poverty don't have internet access or money to buy what is advertised to them.
    4 Feb 2012, 11:17 AM Reply Like
  • GCA10
    , contributor
    Comments (6) | Send Message
    There is a bear case on Facebook, but hey, Exmouth, your jitters don't make sense.


    1. FB's earns grew 65% last year. It's not easy to find such growth rates in a large cap co. Bulls will buy it on the belief that growth will continue. You've got to convince me that it will slow down in a hurry.


    2. Exxon's business is largely dependent on oil. Microsoft is largely dependent on software. Wal-Mart is largely dependent on shopping. Everyone depends on something. You've got to convince me that there's something bad about being in the online ad business. Looks pretty good from here.


    2a. They've also got a payments business that grew more than 4x last year and could be morphed into a new Paypal, Visa, etc. There's huge execution risk on that, but the bull case for payments is huge.


    3. FB gets less than $5 of revenue per active user now. The growth case involves getting more $$ from existing users. Total guesswork as to what will happen there, but obviously you could extrapolate to any number imaginable. Having nearly one billion users now is not a liability.


    4. Everyone respects your right not to join Facebook. I don't smoke, but that doesn't mean Altria is a bad investment.


    5. It isn't 1954 out there in the Third World. Brazil has 112% cell phone penetration (why stop at one when you can have two!) Chinese auto sales are bigger than U.S. car sales. Even India has a huge middle class that can generate way more than $5/person of annual revenue for Facebook. Overall, Facebook has rolled into foreign markets with stunning speed, and the playbook for strong U.S. companies going global has been a happy story for American investors many times.


    Sure, at some point in 2012, Facebook may trade briefly at ridiculous levels and need a whupping. Wait till someone says it's worth more than Google. Then you can pull the fire alarm.
    5 Feb 2012, 02:04 AM Reply Like
  • Dr. V
    , contributor
    Comments (1168) | Send Message
    Who said Facebook is large cap?


    Recheck that quickly, they aren't even listed yet.
    5 Feb 2012, 05:51 AM Reply Like
  • forloveofmoney
    , contributor
    Comments (8) | Send Message
    This IPO is going to end badly for many people. A company that employs a mere 3,000 people, taking billions of dollars of people's disposable incomes in return for a bunch of 1s and 0s -- valued at $100 billion! I admit Facebook is a truly remarkable feat in social interconnectivity. But $100 BILLION? Geesh! When the economy finally plunges into the abyss, let's see if Americans can live off all the virtual gourmet food and sodas they've been paying for with REAL HARD EARNED MONEY.
    4 Feb 2012, 11:26 AM Reply Like
  • Chris Lau
    , contributor
    Comments (3970) | Send Message
    How can (GOOG) Win?
    Be simple. Be in control. Destroy Facebook with ad block plus.
    Example - Ad block for Google chrome (there's one for firefox, etc):
    4 Feb 2012, 08:13 PM Reply Like
  • Dr. V
    , contributor
    Comments (1168) | Send Message
    Google has already won.


    Facebook earned only 1/10 of what Google earned in 2011.
    5 Feb 2012, 05:52 AM Reply Like
  • George Liu
    , contributor
    Comments (20) | Send Message
    Supporters of Facebook will point out that Facebook has completely revolutionized communication in the 21st century.


    Critics of Facebook will wonder if this revolution is overpriced and unsustainable.
    5 Feb 2012, 03:27 AM Reply Like
  • Escobeezy
    , contributor
    Comment (1) | Send Message
    I say overpriced and unsustainable.
    5 Feb 2012, 08:44 AM Reply Like
  • forloveofmoney
    , contributor
    Comments (8) | Send Message
    The future of Internet connectivity -- and all the other potential commercial off-shoots of this phenomenon -- is definitely mobile-based. Fewer and fewer people will want to (or have the time to) look at what their friends of family are doing through a laptop or PC.


    With smartphones, everyone is gearing towards going mobile with almost everything they do online. I think Facebook is a late-mover in this area, and that Twitter actually beat them to the punch. It's probably why Facebook has been trying in vain to make its interface more mobile-friendly. But in reality, the whole concept of Facebook necessitates you or me sitting down in front of a screen for an extended period of time, reading up on things about other people that may or may not have interested us in the first place.


    I've been an investor long enough to know that owners of many privately-owned companies only list their shares when they've already reached the peak of their growth, and would like to have an easy "out" via the stock market. Why would the owner of a company supposedly so wildly-profitable and growing by leaps and bounds want to have thousands of other people (public shareholders) have a say ... and more importantly, have a share of the profits?


    The true amount of capital raised by the company isn't just the $5 billion it's nailing down from the IPO. It's the tens of billions of dollars more that is added onto the company's total value, validated by the IPO. And unless the company can show us they can grow their earnings from $1 billion a year to $10 billion a year in the near future, they could have theoretically just put that capital ($100 billion) in the bank and be more profitable.


    And yes, they're no different from any other company in the sense that their dependence on advertising is just a normal part of their business. This shouldn't be taken against Facebook. But in the same token, they shouldn't be allowed to trade at 100x P/E, while all other businesses trade for between 8 to 15 times.
    5 Feb 2012, 09:27 AM Reply Like
  • Dr. V
    , contributor
    Comments (1168) | Send Message
    1) Market capitalization ONLY represents the public consensus on the value of a company's equity, full stop.


    Since Facebook has until yet, no equity to speak of (by definition)it is worth zero (0), and any attempt at valuation, would be purely speculative and amateurish at best.


    Like a vase in a museum they label as "priceless", which is bullsh*t. What is the replacement cost determined by the insurance underwriter? That is the "market price". See, everything has a "price".


    (The POTENTIAL is big, I will give you that one, HOWEVER, residual business being generated by advertising is not what Facebook is worth, full stop. That is an effect that is not finite by any means.


    *That's like charging someone a Billion USD for a sportscar because of the "get's you laid" value.


    We must try to valuate Facebook, the "organ" itself, ONLY as a social networking vehicle, nothing more.


    * I repeat MAYBE $ 4-5 Mil USD (with the Patents) on a good day, being VERY generous.


    2) Market capitalization is the total dollar market value of all of a company's outstanding shares. Market Cap is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determining a company's size, as opposed to sales or total asset figures. Since Facebook owes over $20 Billion to venture capital firms, I would valuate them in a negative right now. What "tangible" value do they have?


    3) Since they (Facebook) are not yet listed, it's an Underwriter's "guestimate".
    6 Feb 2012, 02:02 AM Reply Like
  • LKofEnglish
    , contributor
    Comments (4385) | Send Message
    count me sceptical. love groupon, love linkedin. "i don't do facebook" pretty much separates me from all the "modern people" i imagine. i was suprised at the lack of hype until later in the week actually. i would buy Morgan Stanley here however.
    5 Feb 2012, 02:30 PM Reply Like
  • Dr. V
    , contributor
    Comments (1168) | Send Message
    Someone is paying attention.


    My vote for "Comment of the Day"


    Well done.


    (I agree, and do not do FB either. If I want an "endoscopic experience", I can make an appointment for a Colonoscopy.)
    6 Feb 2012, 02:06 AM Reply Like
  • Josef Schuster
    , contributor
    Comments (21) | Send Message
    I think the U.S. IPO Fund ETF (FPX) is a better way to bet on Facebook. Its trading at an ALL-TIME high today and well diversified.
    6 Feb 2012, 05:17 PM Reply Like
  • Dr. V
    , contributor
    Comments (1168) | Send Message
    The short event will set you free.


    Within 72 hrs after emission, we'll see a 20-25% drop, watch them run for their lives to get out before close.
    7 Feb 2012, 01:51 AM Reply Like
  • Chris Lau
    , contributor
    Comments (3970) | Send Message


    "MJW: I think the "dot com boom 2.0" has begun. There seems to be so much emotional and reactionary money on the street - especially around this deal. Does no one have a memory of 10 years ago? Valuations based on nothing? Millions spent on vaporware? I think your allusion to Henry Ford is an apt one. Zuckerberg's paranoia is now becoming legendary in Silicon Valley. He wouldn't be the first founder to feel this way - but given the amount of media attention - it's troubling. Frankly, Facebook
    is not your typical but I believe it is heading for the same
    fate as many of the tech bubble dinosaurs of 10 years ago."
    7 Feb 2012, 08:32 AM Reply Like
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