Facebook Stock Sold At $56 Billion Valuation

[Guest3722A]

Private shares market Sharespost just sold 165,000 Facebook shares for $25 each. That price implies a $56 billion valuation of Facebook.
In an email to members, Sharespost said that because the auction was "significantly oversubscribed," it will conduct more, soon.
Yesterday, Wedbush analyst Lou Kerner said he thinks Facebook could easily be worth $200 billion by 2015.
He said Facebook revenues will reach $32 billion thanks to $5 billion in social games credits, $5 billion in off-Facebook ads, and $22 billion in on-Facebook ads. He said Facebook will control 20% of the entire Internet ad market.
Why is Facebook hype so strong right now?
Some ideas:
Tremendous user-adoption. The site now has well over 500 million uniques.
Revenue traction. Last spring, we heard Facebook revenues could cross $2 billion this year. Who knows where the projections are now.
Some very successful industries are being built on top of Facebook – group-buying and social gaming – and Facebook is collecting "taxes" on those industries. In social gaming, Facebook collects 30% PLUS marketing expenses.
Facebook keeps hosting press conferences for product rollouts and press keep attending them.
Some reason hype shouldn't be so strong?
We have no real idea if Facebook revenues are actually near $2 billion. The company is private and doesn't have to report numbers to anyone.
Groupon and its clones buy lots of Facebook ads, and we don't know if group-buying is a sustainable advertising model. Some local merchants say it kills their margins.
Zynga and the other social game companies are desperate to find a way to live off Facebook. Google is supposedly building an alternative.


Read more: Facebook Stock Sold At $56 Billion Valuation In "Significantly Oversubscribed" Auction

 

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[Rickson9]

Going forward, because of the internet, games overall are going to bring in massive dollars. The demographic isn't the 1980s 12 year old boy anymore.

 

[lightning]

Facebook has become an absolute money making MACHINE! And the fascinating part?



Its absolutely FREE for people to use it. Heck my elderly 68 year old Aunt, (who barely knows how to use a computer!!!) now has a Facebook Profile, just because she wanted to be able to talk to her Grandkids more frequently and have access to family albums her kids have uploaded. It is hard to wrap your head around just how big it has become, or just what a MASSIVE, massive, success it really is. Kudos Mark Zuckerburg, you really did change the world with this one!

 

[lightning]

By the way, for anyone who STILL hasnt seen "The Social Network", do yourself a favor and rent it or buy it when its released to DVD shortly. It was probably my favorite movie of 2010, and had a TON of great Entreprenurial lessons in it.

 

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[Darkside]

Facebook has become an absolute money making MACHINE! And the fascinating part?



Its absolutely FREE for people to use it. Heck my elderly 68 year old Aunt, (who barely knows how to use a computer!!!) now has a Facebook Profile, just because she wanted to be able to talk to her Grandkids more frequently and have access to family albums her kids have uploaded. It is hard to wrap your head around just how big it has become, or just what a MASSIVE, massive, success it really is. Kudos Mark Zuckerburg, you really did change the world with this one!

It might be a money making machine but it's not really valued at anywhere near $56 billion. It's revenues are reported to be in the $1-2 billion range, which while great do not justify a valuation of $56 billion. With those kinds of revenues, Facebook's true current valuation would be in the range of $10-$20 billion.

 

[Guest3722A]

It might be a money making machine but it's not really valued at anywhere near $56 billion. It's revenues are reported to be in the $1-2 billion range, which while great do not justify a valuation of $56 billion. With those kinds of revenues, Facebook's true current valuation would be in the range of $10-$20 billion.

Out of curiosity, how did you come to this valuation?

 

[ramy98]

I just watched the movie on Mark Zuckerberg and the rise of facebook last night....

Hi Five to Mark and the face book crew for a job well done... :eusa_clap:

 

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[Russ H]

Facebook has become an absolute money making MACHINE! And the fascinating part?
Its absolutely FREE for people to use.

It is hard to wrap your head around just how big it has become, or just what a MASSIVE, massive, success it really is. Kudos Mark Zuckerburg, you really did change the world with this one!

Indeed.

500,000,000 uniques.

Compare that to the entire population of South America: 385,742,554

Or the entire population of the US, Canada, and Mexico, combined: 448,177,675

You can see why this has become a web phenomenon. It'll be interesting to see where it goes.

-Russ H.

 

[TC2]

So what have we learned from Facebook's success in the Fastlane world?

MySpace is not the first social network and Facebook isn't the last one.

I would love to hear everyone's opinions!

 

[Darkside]

Out of curiosity, how did you come to this valuation?

I'm going based on it's current revenues of 1-2 billion. If it were a publicly traded company, it's market cap would be about 10 times it's revenue, especially since it's a technology company that's expected to grow a lot. So, 10 times 1-2 billion is 10-20 billion. Think about it this way, at current revenue streams, Facebook could earn 10-20 billion in 10 years with no growth at all, so if someone were to buy it at that valuation, it would be like getting paid all at once for 10 years worth of work.

Of course, most people in Zuckerberg's position decide not to sell because they expect their companies valuation to grow, and that will likely be the case with Facebook since they're actually monetizing pretty poorly considering the amount of users they have; they could potentially do revenues of 25+ billion a year.

 

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[Guest3722A]

So what have we learned from Facebook's success in the Fastlane world?

MySpace is not the first social network and Facebook isn't the last one.

I would love to hear everyone's opinions!

Good thought. In knowing the time we live in with the growth of innovation and creativity, I too wonder who's out there (and how many) at this very moment working on the the next multi-billion dollar idea that's soon to be unveiled.

 

[Guest3722A]

Good thought. In knowing the time we live in with the growth of innovation and creativity, I too wonder who's out there (and how many) at this very moment working on the the next multi-billion dollar idea that's soon to be unveiled.

This brings me to another question... If Facebook IPO'd today, at what price do you think it would open at?