Is Facebook Worth $50 Billion?

[zengrifter]

Is Facebook Worth $50 Billion?

By Chris Wood, Senior Analyst, Casey’s Extraordinary Technology

Just before the new year, Facebook inked a deal with Goldman Sachs and Russian investment firm Digital Sky Technologies that values the company at a whopping $50 billion.

Yes, Facebook is the runaway leader in social networking with more than 550 million users, and it’s the most-visited website in the U.S. as well as the most-searched term, but does the company really deserve a $50 billion valuation?

Let’s put things into perspective.

First of all, $50 billion is no small sum. In these days of multi-trillion-dollar deficits and bailouts, $50 billion might seem small, but it’s still quite significant when we’re talking about a company’s market capitalization. With $50 billion, you could buy both Dell Inc. and Yahoo! Inc. and still have a couple billion left over to drop on necessities like yachts, jets, and private islands.

What’s more, when we compare Facebook to other companies with a similar market cap and to its technology peers, that $50 billion valuation starts to look more and more out of whack.

MORE- http://www.caseyresearch.com/displayCdd.php?id=619

[apex]

$50B is kind of like a Light-year to me in that it is really hard to wrap my mind around. I have not looked at how Facebook compares to other companies so I can't really speak intelligently on that.

I will say that Facebook's business model is amazing! People willingly give up all of their information, allowing advertisers to efficiently reach their target graphic. Want to advertise to only women aged 25-32 who are engaged? Try doing it with anything besides facebook. I really like it, and see it growing A LOT.

[blackchipjim]

Traditionally one would think FB is not worth the price but, alot of companies in this field seemed the same way. Were we not surprised by the past companies that skyrocketed before we could board the ship. Conventional wisdom now says yes it's worth it and the general population that frequetly uses it will ensure it's future gains. If I had the wherewithall I would say buy it when you can.

[zengrifter]

Originally Posted by blackchipjim

Traditionally one would think FB is not worth the price but, alot of companies in this field seemed the same way. Were we not surprised by the past companies that skyrocketed before we could board the ship. Conventional wisdom now says yes it's worth it and the general population that frequetly uses it will ensure it's future gains. If I had the wherewithall I would say buy it when you can.

From the Casey Research article >>

Although Facebook is a private company that only trades in the secondary market and it doesn’t release much information about its financial results, we have it on good authority that the company generated between $1 billion and $1.3 billion in revenue during 2010 – and that figure is expected to rise to between $1.7 and $2 billion in 2011.

Based on the high end of the range in 2010 of $1.3 billion, the newly inked deal with Goldman implicitly applies a price-to-sales ratio of 38.5 to Facebook stock, exceptionally rich, even for a high-growth story.

To see just how rich this valuation is, I decided to compare Facebook’s sales and price-to-sales ratio to fourteen publicly traded companies with a market capitalization right around $50 billion (a list that included Altria, Amgen, Bristol-Myers Squibb, and Union Pacific). And then I compared Facebook’s numbers to six technology powerhouses.

[Sharky]

I do not facebook, however my wife does and we were using her account recently to search for old friends/acquaintances in the numerous cities we've lived in.

I actually thought is was pretty cool seeing some old, actually older , faces from years ago.

I did find what I feel is a MAJOR flaw, how on earth can you not search for a name by CITY and/or STATE? I did see this info on some of the people I search, so the info is in their db.

I think part of the idea/draw/fun is connecting with old friends...try locating 'Mike Smith'...good luck with that one!!!

I would NOT buy stock in such a company as little things like this can give you insight into how the company is run.

PS: If we are just not FB literate and this can be done (should be some advanced search, eh?) it should be more visible. If someone could fill me in on how this is done I'd appreciate it and I stand corrected. OW, I'm not buying.

[zengrifter]

More insanity >>

Twitter Is Now Worth About As Much As The New York Times

Ps - Follow us on Twitter (key accounts under mgmt)--

http://twitter.com/#!/ADMAXX
http://twitter.com/#!/CatalystHouse
http://twitter.com/#!/CESQB
http://twitter.com/#!/GandhiWorldwide
http://twitter.com/#!/420MMJ
http://twitter.com/#!/rjs_financial
http://twitter.com/#!/1stNatProcess

[zengrifter]

ZenGrifter on Twitter?? >

http://twitter.com/#!/zengrifter

[zengrifter]

Originally Posted by zengrifter

ZenGrifter on Twitter?? >

http://twitter.com/#!/zengrifter

Just to clarify, the above is an impersonator. "No, I am Zengrifter!"