Because my friends Like it?
The price/sales ratio is scarier to me because I'm pretty sure that when Google had $4B in revenue it had a much lower valuation.
I will write more about this but to turn into a 10-bagger (which would be a good goal for an IPO), Facebook would have to become a $1T market-cap company -- the largest in the world. It will already be one of the world's largest company.
Why buy facebook when you can buy Apple at a P/E of 11?
Re: Facebook Evolution
cat tail
2/1/2012 8:57:36 PM
Let's just hope Zuckerberg and his team behave themselves better than the Groupon jerks did during their companys quiet period.
No matter how often Mark Zuckerberg insists that he plans to keep the focus on users and not shareholders, operatiing as a public company will inevitably create new demands for accountability and focus.
Facebook has big plans. Do you think it will be able to pull them off--including moves that may be perceived as unwise or risky--with shareholders at the door?
Re: S-1 Details
Tenacious
2/1/2012 8:44:52 PM
I thought these numbers from the S-1 were interesting too:
Net profit in 2011: $1 billion
Revenue in 2011: $3.711 billion
Revenue in 2009: $777 million
$3.9 billion: Facebook's cash in 2011
$305 million: Facebook's cash in 2008
Facebook Evolution
driven
2/1/2012 8:10:34 PM
How much do you think being public will change Facebook, if at all?
While there are stocks with higher P/E ratios (Salesforce, for one) -- and while that number is likely to come down going forward, it scares the heck out of me.
Interestingly enough, it's consistent too. Facebook earned $600m in net income in 2010. In January 2010, it raised $2b from DST, Goldman Sachs and its clients at a $50b valuation, making its TTM P/E ratio 83.
The S-1 is filed. The document is here.
Some quick hits:
$5B offering
Zuckerburg owns about 28%, so he may be the first person worth $30B by the age of 30.
Revenues were $3.7B and $1B in profit.
If it goes public at a $80B-$100B market cap, as predicted, could have a P/E of 80 or so. Price/Sales will be something like 20X.
Many big-time entrepreneurs are like that though. Just take a look at Larry Ellison.
Re: Facebook ad nauseum
driven
2/1/2012 11:29:01 AM
It's a good thing Zuckerberg found his calling because he doesn't sound like he'd have found many friends without the cushion of a few billion dollars around him.
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