It's Finally Here - $10 bn IPO at a $100 bn valuation
WSJ reporting Facebook is targeting an IPO date between April and June 2012, possibly raising $10 billion at a $100 bn valuation. This company is legitimate, has 800 million users and is expected to generate $4 billion in revenue by year end. But one question remains: who will be the underwriter, if any?
The journal is reporting that internal Facebook employees have already begun drafting the prospectus. So, does Facebook take the traditional approach, shove 2% down Wall Street's throat instead of 7% or Dutch auction?
I'm confused, wouldnt 4bn be too low for a $100bn valuation?
As an indirect investor in facebook (through Accel IX, Technology Crossover Ventures VI, Founders II and Accel Growth) I'm pretty pleased about the crazy valuation, whether they'll be able to dispose of their holdings in hte secondary market at anywhere near that level remains to be seen!!!
I believed Goldman had this deal on lock, but I feel like MS Tech out in Menlo Park has been doing work.
regular investor has no chance of making money off this...HF are going to eat this shit up
patpat the other 96bn is for the "like" button.
I cover this a little in today's post. I think Groupon has fucked Facebook. Or at least I hope it has.
why do you hope so?...genuine question...no sarcasm
Because these ridiculous valuations are destroying the IPO market, and preventing worthy companies with tangible results from accessing the capital they need to grow. I really thought this Flavor of the Month bullshit went out of style with the dot com bust. But here we are again.
I'm hoping people will look at Groupon and say, "Man, that was a really shaky deal. I'm not going anywhere near Facebook." and it will force a realistic valuation.
There's no conceivable way an online scrapbook of drunken sluts (as much as I love drunken sluts) is worth a tenth of a TRILLION fucking dollars.
This. Such a more telling description than "Facebook helps you connect and share with the people in your life"
Considering the total market size of the night club industry and alcohol driven by "drunken sluts" - it seems about right....
I dunno Eddie. Folks said the same thing about Google years ago.
I think a growing internet firm is worth 15-20x earnings. If they can show $5 Billion/year in earnings and ~15% growth, maybe they're worth $100 Billion. But you're absolutely right. Wall Street should pay for sustainable and growing earnings, not ideas.
Just to be clear, OP said $4B in revenue, not earnings. That said, I think FB is more akin to other tech giants that dominated their businesses, such as Google/Amazon/Ebay. They're not a scam/going to blow up like GRPN.
I don't see how Pepsi is worth more than Facebook, sorry. One's a near-second-tier commoditized business, and the other has a stranglehold on the future of media.
Pepsi generated $11bn of EBITDA and almost $60bn in revenues with a 34% ROE in 2010. Facebook lost money, and is 'forecast' to generate $4bn of revenue in 2010 with almost half of it coming from zynga-related revenues (farmville, mafia wars etc) which are near certain to have a shelf life.....ignore the fact that you know what facebook is and probably use it every day - if it was an Italian based online business with the same financials and similar growth prospects would you value it at anywhere near $100bn (or a tenth of a trillion as someone cleverly pointed out)?
Intel makes about $100 whenever one of the 80% of the computers that carry its chips are sold. And with web hosting and distributed computing, there are probably one or two servers for every PC that also carry Intel's chips. Most of these computers are cycled every 3-4 years at most. Can someone please explain to me how Facebook plans to wind up earning more than that? How are they going to earn $30/year from all those servers that no human ever touches? From the millions of servers sitting in Google's datacenters?
If Facebook is worth $100 Billion because it will eventually have $10 Billion/year in earnings for a 10x PE, Intel is worth a heckuvalot more than it currently is, because it's going to have to start putting chips in a lot more PCs that will be needed to access Facebook accounts.
Is that the Titanic I see?
Look at Sharepost.com for implied valuation
tradingevents.blogspot.com
IP,
The difference is Google had demonstrable sales and earnings and was monetized from Day One. The monetization of Facebook can be characterized as clumsy and haphazard at best. I actually think Zynga has a better business model built on the back of Facebook.
I'll be the first to admit I'm wrong if the red herring for Facebook shows real earnings. But I don't think I will be. While I don't think it'll be shady accounting like Groupon, I'm betting it's gonna be a bunch of pie-in-the-sky bullshit. And Wall Street does the American economy a huge disservice by letting that shit fly.
FUCK FB
I am not fond of Facebook
i do not even have a facebook, all my high school friends think im dead
Even with a Dutch we'll still see money on the table (see Google IPO)
no way it is worth more than pepsi, people are insane.
This is ridiculously overvalued. Facebook is NOT on the same level as Pepsi and JPMorgan Chase. This is way over-hyped and I doubt will hold up. The price will undoubtedly spike when it hits the market, but it will suffer a huge crash after people wake up
Serious question: Has anyone here ever clicked a freaking advertisement on Facebook?
I sure as hell know I haven't. Their "targeted ads" are just so "smart" ... like, since my Status says 'Single,' I get 20 freaking ads asking me to meet local sluts in my area.
Serious question: Who doesn't use AdBlock? lol
When valued at 1 / 150th of our national debt it doesn't look all that bad.
When valued at 1 / 150th of our national debt it doesn't look all that bad.
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