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The Companies Worth Less Than Facebook
- togasystems 16y agoNewsCorp?....well it is final....Facebook won
- democracy 16y agoon paper of GS & DST analytics they certainly did
- noelchurchill 16y agoI wonder what the Fortune 500 would look like if people were to guess at which companies were more valuable than others.
- nhangen 16y agoI won't buy this until FB goes public and we see how it fares in an open market. Though I won't argue against the current valuation, I'm not sure I believe it yet.
- 16s 16y agoWow... neat list. FB is not more valuable than BMW, AIG or Nokia. There's just no way. And if it turns out that they are, then something is fundamentally wrong.
- dantheman 16y agoWhy? I barely use facebook and it's more important to me than BMW or Nokia, and AIG should be out of business (but that's another argument). I assume facebook is more important to most people than BMW or Nokia, and though the value may be less per person it could be easily be more in aggregate.
- 16s 16y agoI would think that hundreds of years of engineering (mechanical and electrical) and solid products used all across the globe would be more valuable than a social website, but maybe I'm wrong.
- rospaya 16y agoYou are presuming the stock market is somehow fair.
- 16s 16y agoYes, you are right. I was confused. BMW engines deliver pigs to markets so people can eat. One can buy and sell virtual pigs on FaceBook by playing Farmville. To me, actual bacon is more valuable than pretend bacon.
- justin 16y agoHow "important" work is is only one factor in the creation of value. How much you produce, how it is valued by other people, what your margins are, what your future revenue streams will be -- these things are all factored into company value. There are many companies that make non-essentials that are valued more highly than farms and utilities.
- dstein 16y agoIt's important to note that stock valuations are derived from the expected future profitability of a company. Stock is a claim on future profits. Compared to a company like Halliburton, who has to build billion-dollar oil rigs before they make any profit, a technology company like Facebook is a lot more lucrative and thus its stock can inflate quickly if the profits expand faster than costs. And generally technology costs go down over time while profits increase exponentially. So you have a powder-keg scenario in Facebook if, and only if, they find a profitable business model based on their enormous userbase. And they better find that business model or the stock will crash like it's the year 2000.
- fleitz 16y agoAccording to their PR they have found such a business model and are now profitable.
- jerf 16y ago"profitable" != dstein's "powder key scenario". I will totally believe they are profitable, I do not believe that right this second they are bringing in enough to justify a $50B valuation on that ground alone.
- arctangent 16y agoHistory will tell whether this purported business model works out quite as well as their PR department promise. As an aside, this article of Charles Ponzi makes for great reading ;-) http://en.wikipedia.org/wiki/Charles_Ponzi http://en.wikipedia.org/wiki/Charles_Ponzi
- magicalist 16y agowhile stock valuations and expected future profitability are usually correlated (to some extent), if a company isn't paying dividends, wouldn't it be much more correct to say that stock valuations are derived from the expected future valuations of that same stock?
- dstein 16y ago
- sdizdar 16y agoMarket cap / valuation comparison is only meaningful if you compare companies in the same industry. For example, priceline.com has market cap of about $21B. In that respect, facebook valuation is not so high.
- xenophanes 16y agoUmm, no. Exactly the opposite. If the market caps in one industry were wrongly valued relative to another, then investment would move (b/c there would be opportunity for arbitrage and profit). Why did you think the economy was divided into separate and unrelated sections?
- americandesi333 16y agoOne of the major component of stock valuation is the expected growth of the company, which somewhat accounted for market and internal 'risk'. However, I would argue that in Facebook's case the risk is higher than what is used for this valuation. Therefore, I do not see Facebook being worth more then say Target.
- phr 16y agoI thought EMC bought VMWare?
- dauphin 16y agoThey did, in 2001.
- true_religion 16y agoFacebook should use the same brilliant strategy that AOL did, and buy out a clearly sustainable big name company. Maybe BMW, how about that?
- adlep 16y agoFaceMagazine is actually worth: http://www.youtube.com/watch?v=cf7uJDhVZIE http://www.youtube.com/watch?v=cf7uJDhVZIE Because I said so.