Skip to comments.Well, Now That Everyone Has Sobered Up, Let's Figure Out What Facebook Is Actually Worth...
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 ...
Tech IPO's are always "overpriced." It's almost tautoligical.
Does anyone know what this company is worth? It seems to be nearly entirely potential; and nobody knows what the upside is -- it's practically incalculable; but so are the contingencies.
How long does the average user sit in front of a Facebook page? How many man hours are spent viewing facebook pages each day globally? What is buying time in front of that captive audience worth? Somebody run the numbers. I'm sure it's huge.
The problem is that with a half billion shares out, it's no slam-dunk bargain.
FB can't bring in ad revenue because most users use cell-phones to access, and they don't display ads. Worse, most users via the net won't click on an ad, or buy via one.
JMHO, FB isn't worth a fraction of it's current 'value' and it's stock price will shrink rapidly. Look at Facebook partner Zynga. Trading was stopped twice on Friday due to plunging value - closed at an all-time low.
My bet, trading on both Zynga and FB will be a wild ride to major losses.
Elite HS in Hawaii to that?
He was a foreign student like elizabeth warren is a cherokee.
AA quota hogs.
Can someone scan the bar code?
personally I would not give $.02 for facebook stocks.
Approximately a 0.30 CPC which isnt’ too bad. I would assume by these numbers you probably get an EPC of $10 or so? Don’t forget that you’re now beholden to Google. They have a bad habit of “slapping” sites for no apparent reason. If that happens, you’re going to see that CPC double or, more likely, triple.
And there have been plenty of easier and cheaper ways to reach customers. Google isn’t the first PPC company to come along but they are definitely the most expensive. Plus, there are too many old and easy SEO tactics for various search engines that you could rank a site for and rank in the money. Google is currently winning the adverting war, however, and marketers are stuck with them.
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.
built into your statement is the presumption that the sheer scale of truly global footprint combined with costs that are miniscule by historic proportions is something that is comparable to the measures that we’ve all grown up with. I disagree. The upside is truly unknown.
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