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Facebook was valued at $104b when it had an IPO and there was similar shock at valuation. It's now worth $370b because they were able to monetize mobile better
by jonknee 10y ago
Facebook was valued at $104b when it had an IPO and there was similar shock at valuation. It's now worth $370b because they were able to monetize mobile better than anyone else. Snapchat might fizzle out, or it might be able to successfully pull off mobile branding advertising (opposed to the social targeted advertising that Facebook owns). If so, watch out.
- samfisher83 10y agoEven their valuation is based on some very high growth rates. If their growth rates drops the stock would tank.
- jonknee 10y ago> If their growth rates drops the stock would tank. Which is the case for literally every publicly traded company.
- samfisher83 10y agoFB FCF is roughly 6B their cap is 370B. That is 60x of FCF. Most companies aren't that extreme. If there was a slow down in Growth their fall would be much larger then a more mature company because a majority of their valuation is based on growth.
- jonknee 10y agoThere is no denying FB is priced for growth, but it's growing like crazy while the rich valuation is coming down. Your $6B FCF figure is from last year and they are blowing that out of the water so far this year (+60% in the first 2 quarters). It's not fair to use today's stock price with last year's cash flow and decide that it's extreme.