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Well, Now That Everyone Has Sobered Up, Let's Figure Out What Facebook Is Actually Worth...
Business Insider ^ | 05/21/2012 | Henry Blodget

Posted on 05/21/2012 3:02:07 PM PDT by SeekAndFind

Thank goodness that's over.

The Facebook IPO could have been a major disaster for millions of individual investors.

If the stock had "popped" to a truly ludicrous level on IPO day, millions of investors would likely have piled into it, hoping for further gains.

And then, eventually, the hype would have faded, and these investors would have gotten creamed as the stock fell back to a more reasonable price.

As it was, Facebook's IPO price was not truly ludicrous--it was just extremely expensive. The "extremely expensive" part was why I called Facebook "muppet bait." And it was why I kept asking giddy IPO buyers what they were seeing that I wasn't. The answer, everyone said, was "Facebook's future potential," a.k.a., "option value."

But the trouble with buying and valuing stocks based on "option value" is that this measure is extraordinarily subjective. Depending on the market's mood, "option value" can be huge... or tiny.

Apple, for example, has enormous potential "option value"... but the market is valuing Apple at only 10X 2013 estimated earnings per share. Meanwhile, at the IPO price, the market valued Facebook at about 65X consensus 2013 estimated earnings per share.

That is extremely expensive.

And now, as many Facebook IPO buyers finally wake up to that fact, the stock is falling.

So, at what level is Facebook a "buy?" When does the company's "option value" actually offset the risk that shareholders will get clobbered if the market's mood changes?

What is Facebook actually worth?

Let's think about that...

(Excerpt) Read more at businessinsider.com ...


TOPICS: Business/Economy; Computers/Internet; Society
KEYWORDS: facebook; facebookipo; trigtruther
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To: SeekAndFind

I don’t see how it’s worth anything.

It produces no product and has no significant holdings that I’m aware of.


21 posted on 05/21/2012 3:48:06 PM PDT by chris37 (Heartless.)
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To: SeekAndFind

The people who invested in Facebook will experience what BHO experienced with his “investments” in alternative energy. The difference will be that the people who bought Facebook stock will lose their OWN money.


22 posted on 05/21/2012 3:56:56 PM PDT by MIchaelTArchangel (Da Bro' Gotsta Go!)
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To: freedumb2003

GM announced before the IPO they were pulling their fb ads because they didn’t bring in any business for them. That’s about all fb has to offer in the way of revenue, advertising, isn’t it?


23 posted on 05/21/2012 3:58:49 PM PDT by FrdmLvr (culture, language, borders)
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To: SeekAndFind

Worth a few hundred millions at best...possible ad revenue, selling personal data, etc.

It reminds of pre-Internet-.com-bubble stocks...buy buy buy then the pump & dump brokers short the crap out of it, forcing the dumb money (us) to run and either they buy very low, sell a little higher and make the last few millions before the status of dead-money-stock is reached.

That’s the story of the late 90s garbage redux in Internet crappy and hyped IPOs.

Anyone who thinks this is the next Apple is sadly mistaken.

IMO, of course.


24 posted on 05/21/2012 3:59:02 PM PDT by melancholy (Professor Alinsky, Enslavement Specialist, Ph.D in L0w and H0lder)
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To: CharacterCounts

Look up the term “Google slap” and then decide how much “bang for the buck” Google provides. Their content network is a joke as well. Advertisers are really a little tired of Google and their strong-arm tactics with Adwords. I’m not going to predict Facebooks stock value, but there is plenty of opportunity for them to expand their advertising revenue.


25 posted on 05/21/2012 4:05:00 PM PDT by nonamer
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To: SeekAndFind

Different subject but has to do with fB. I found this interesting that FB banned mother of the child with disabilities while FB inventor or whatever he is just married a pediatrician.


26 posted on 05/21/2012 4:07:12 PM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: SeekAndFind

Different subject but has to do with fB. I found this interesting that FB banned mother of the child with disabilities while FB inventor or whatever he is just married a pediatrician.


27 posted on 05/21/2012 4:13:01 PM PDT by freekitty (Give me back my conservative vote; then find me a real conservative to vote for)
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To: SeekAndFind

I have no idea why anyone would buy a single share of Facebook stock. People don’t go to Facebook to see ads.


28 posted on 05/21/2012 4:18:01 PM PDT by Bryan24 (When in doubt, move to the right..........)
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To: Bryan24

Indeed, and FB made an IPO because they knew it was worthless. They would not sell low, would they? Ad revenues are then slated to go down too. That means the economy is going to go to the crapper.

Once it does, then people, unemployed, might do more facebook time and the revenues might go up.

Facebook is overall too complicated and any new features added to it will tank it for good.

The Freerepublic model is much more user friendly and quicker, imo, because it keeps the old true and tried robust posting methods.


29 posted on 05/21/2012 4:22:33 PM PDT by JudgemAll (Democrats Fed. job-security Whorocracy & hate:hypocrites must be gay like us or be tested/crucified)
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To: nonamer

My business’s website received over a million and a half impressions (and about a 2.5% ctr) in the first quarter 2012 on a $45/day adword budget. This in a very competitive market.

I hate google as much as anyone, but there has never been an easier, cheaper, more effective way of reaching customers.

Without them, I’d be out of business.


30 posted on 05/21/2012 4:22:51 PM PDT by FlJoePa ("Success without honor is an unseasoned dish; it will satisfy your hunger, but it won't taste good")
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To: SeekAndFind

Is there some reason everyone (or seemingly everyone) is obsessed with FB? Seems like the promoters and detractors can’t speak of anything else.


31 posted on 05/21/2012 4:24:35 PM PDT by Larry Lucido
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To: umgud
Just curious, what was FB going to do with all the money they thought they were going to raise?

Play Mafia Farms (or whatever they play over there). :-)

32 posted on 05/21/2012 4:27:29 PM PDT by Larry Lucido
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To: umgud
>”Just curious, what was FB going to do with all the money they thought they were going to raise?”<

CA Governor Jerry Brown was hoping the new FB Millionaires and Billionaires would pay off the $16 Billion Dollar Deficit and throw in a few extra bucks for High Speed Rail.

Obama just wants the money for his Reelection.

I'll bet most if not all of any money “donated” will go to Pharaoh Obama. Jerry Brown won't get a dime except for some Capital Gains Taxes. It won't change a thing. If Democrats have money, they spend every last dime and beg for more. It's their nature.

33 posted on 05/21/2012 4:31:15 PM PDT by Kickass Conservative (A day without Obama is like a day without a Tsunami.)
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To: FatherofFive
You can't make money on free.

10 billion 'free' users will not make a profit.

34 posted on 05/21/2012 4:37:26 PM PDT by FatherofFive (Islam is evil and must be eradicated)
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To: SeekAndFind

I’d run from this one. Way overpriced IMO. I think they (FB management) recognized the fad was ending and cashed out. I believe it is in a fast fade. Be lucky to be $10 by end of 2012.

They can’t push ads to mobile yet and plugins like Adblock effectively block adds in browsers (although the impression may still count.) They also face tremendous infrastructure challenges.


35 posted on 05/21/2012 4:40:47 PM PDT by IamConservative (Shall I try and perhaps fail or shall I do nothing without fail?)
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To: SeekAndFind
So, at what level is Facebook a "buy?"

Depends on what they buy with their money. The Facebook franchise by itself ought to be worth about as much as AOL by itself.

36 posted on 05/21/2012 4:41:54 PM PDT by PAR35
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To: a fool in paradise

OMG — that is so perfect!!

“Is everyone in your time retarded?”

YES!


37 posted on 05/21/2012 5:02:35 PM PDT by freedumb2003 ('RETRO' Abortions = performed on 84th trimester individuals who think killing babies is a "right.")
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To: FatherofFive
10 billion 'free' users will not make a profit.

The web site is free to the users, but advertisers pay money to have their ads seen on users' FB pages.

Some companies make millions of dollars a month on such ad revenue. Even pay their employees quarterly bonuses.

Don't kid yourself. 'Free' web sites do big business and make lots of money.

38 posted on 05/21/2012 5:07:21 PM PDT by Ol' Dan Tucker (People should not be afraid of the government. Government should be afraid of the people)
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To: nonamer

All I know is I get a lot of bang for my buck for my law office.


39 posted on 05/21/2012 5:08:49 PM PDT by CharacterCounts (A vote for the lesser of two evils only insures the triumph of evil.)
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To: IamConservative
although the impression may still count

They do. Impression revenue is earned when the page is served, whether it's displayed or not.

40 posted on 05/21/2012 5:11:08 PM PDT by Ol' Dan Tucker (People should not be afraid of the government. Government should be afraid of the people)
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