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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 wonder what Apple was valued at in terms of projected next year's earnings when it went public.

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.

41 posted on 05/21/2012 5:17:05 PM PDT by the invisib1e hand (they have no god but caesar)
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To: FrdmLvr
"GM announced... pulling their fb ads... 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?"

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.

42 posted on 05/21/2012 6:00:29 PM PDT by Ron C.
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43 posted on 05/21/2012 6:13:18 PM PDT by TheOldLady
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To: Libloather

really!?!?
Elite HS in Hawaii to that?

He was a foreign student like elizabeth warren is a cherokee.
AA quota hogs.


44 posted on 05/21/2012 6:27:09 PM PDT by WOSG (Anyone But Obama)
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To: Libloather

Can someone scan the bar code?


45 posted on 05/21/2012 6:50:32 PM PDT by WellyP (REAL)
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To: SeekAndFind; GeronL

personally I would not give $.02 for facebook stocks.


46 posted on 05/21/2012 6:51:54 PM PDT by Morgana (I only come here to see what happens next. It normally does.)
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To: FlJoePa

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.


47 posted on 05/21/2012 7:26:25 PM PDT by nonamer
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To: FrdmLvr
GM announced before the IPO they were pulling their fb ads because they didn’t bring in any business for them.

I am wondering if this wasn't GM using all the hype in the news about the Facebook IPO for free advertising.
48 posted on 05/21/2012 7:36:45 PM PDT by nonamer
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To: the invisib1e hand
"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."

The same questions we had in the late 90's that lead to the dot com bubble burst and the mild recession that started around March 2000. All the investors were buying up these dot com stocks almost entirely on potential. Looks like some of the investors haven't learned.
49 posted on 05/22/2012 4:48:03 AM PDT by Old Teufel Hunden
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To: AdmSmith; AnonymousConservative; Berosus; bigheadfred; Bockscar; ColdOne; Convert from ECUSA; ...

Thanks SeekAndFind.
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.

50 posted on 05/22/2012 11:41:14 AM PDT by SunkenCiv (FReepathon 2Q time -- https://secure.freerepublic.com/donate/)
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To: Old Teufel Hunden

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.


51 posted on 05/22/2012 1:52:57 PM PDT by the invisib1e hand (they have no god but caesar)
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