Facebook worth $104BN?

Wookster

Well I have to say I think this is an exorbitantly huge valuation, and one that is not supported by the company's performance or prospects.

This valuation makes Facebook 14x more expensive than Google, despite the fact that they have much lower user click through to adverts, not to mention that 30% of Facebook's traffic is via smartphones which makes monetising that traffic quite challenging.

de1amo

FB will get into mobile advertising which will be their next major growth area.--with 40pc of all users of the internet using facebook and the boom of usage in mobiles FB has lots of room for further growth--the money they get from this sale will allow them to suck up apps and companies like 'bing'--they dont really want the facilities they want the brains/talent that will shape the future of the net.

How much did they set the share price at? and has the grey trading begun yet? i follow shares on the American markets and today forcast is for an open of 35 dollars and a chance it will hit 60 dollars by close tonight!

Graham_Devon

Is there only so far facebook can go? I personally don't like it, and have noticed people moving away from it now, especially after other people can post photos of you and link it to you, the timeline, employers using it to vet you and in some cases catch you out.

I'm just wondering how much life there is in it, as it becomes more and more imposing on peoples lives....allbeit, under their own agreement.

I watched a programme on South Korea, and they are now creating cars with the technology to tell facebook and your friends where you are, updated every 30 secs. Seems a bit much to me!

chucky

Wookster wrote: »

Facebook worth $104BN?

It's not worth $104BN, the business model is potentially worth $104BN. There is a big difference.

wymondham

It amazes me how something that just exists online can be so huge in terms of value... one thing that is always true though is that it has a limited life - online apps change far more frequently these days and I have also noticed a move away from Facebook (could this be the reason for the timing??)

Drop Facebook etc and get REAL friends that you actually talk to..!

The_J

It's a ludicrous valuation at it's current stage. The price is purely on future speculation, the internet will become everything in the future.

The risk is that social media could become a bit of a fad and people get bored of "sharing" but there is also the possibility that social media becomes the hub from which you decide how to live your life (not for me but the young kids of today seem to like it).

At the moment monetising Facebook is tough, people with money are skeptical of it but as the young kids of today grow up and start earning if Facebook can move with them and provide a daily service it starts to become a lot more attractive.

If you look at the market of search now you see Google and they cannot be challenged. They have so much money. They can just buy any new start up and their technology.

Facebook is now similar, they cannot be challenged. They can just adopt whatever new trend comes along (eg Places/Foursquare).

I think this will be a good move for Facebook. Zuckerburg needs to get out though, he is holding them back. He had the idea, it was a good idea at the right time and he got the right people involved but it's not an idea anymore, it's a business.

But am I advising you buy at $38? Not in your life, will this be the most it is ever valued? Possibly, although with the right direction Facebook could become the Internet.

the_flying_pig

its profits per year are quite close to $1bn p.a., so, on the bright side, it's quite easy for even relatively inumerate people to calculate the earnings yield [pretty much 1%].

the general public's appetite for magic money trees never ceases to shock me.

IronWolf

I don't think so. I dont forsee the demise of facebook, but at 50x earnings they need a lot of growth to justify the price. That's risky, all too often the growth doesnt come and the SP plummets.

I'm predicting at least a 20% share price rise from the open today though. You heard it here first

Wookster

IronWolf wrote: »

I don't think so. I dont forsee the demise of facebook, but at 50x earnings they need a lot of growth to justify the price. That's risky, all too often the growth doesnt come and the SP plummets.

You mean they need a miracle to justify the share price

IronWolf wrote: »

I'm predicting at least a 20% share price rise from the open today though. You heard it here first

I'm tempted to short it but there is that lovely quote: The market can stay irrational longer than you can stay solvent.

Perhaps I'll wait until the float hubris dies down.

Niv

Personally i dont think it is worth $104B however, even though some people may be moving away from teh social networking side, the local networking, through groups, does seems to be getting more popular. This could mean that it becomes a more valuable tool for small businsess's (and sole traders) to get more local work.

Niv

Generali

It's the greatest shorting opportunity since the pound in 1992 I reckon*.

Facebook Price:Earnings ratio = 104
Google Price:Earnings ration = 19

Facebook is 5.5x more expensive than Google on the most basic measure of share price.

*DYOR.