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Nobody really knows what a reasonable valuation for facebook is. They've yet to turn a profit, and it remains to be seen how well they can monetize all those u

by aneesh 18y ago

Nobody really knows what a reasonable valuation for facebook is. They've yet to turn a profit, and it remains to be seen how well they can monetize all those users. Plus, value is in the eyes of the investor: it was worth over $15 billion to Microsoft, but not even $3 billion to whoever is selling. I say it's all just speculation right now, since their shares aren't very liquid. And even if their shares were liquid, on what basis would you value them?

rms 18y ago
In the next two years of Facebook, they could only be acquired as a strategic investment, valued at $5-7B if a large player like Google/Microsoft/Yahoo tries to buy them. Maybe a sovereign wealth fund? Unless those funds stay away from Web 2.0. Beyond that, yes, they'll have to show revenue. Facebook will be a good test of the ultimate stability of the Web 2.0 Bubble. I think their best strategy is to go into the mortgage market, but the consensus of this board seems to be that Facebook won't succeed in the mortgage market.
- ctkrohn 18y ago
  I highly doubt a sovereign wealth fund would invest in Facebook. Most of their recent equity investments have been in dividend-paying stocks of US banks; they also tend to buy a lot of fixed income assets. Facebook won't be able to pay dividends any time soon, and while I recall them doing a debt offering, I can't imagine it's on the scale that would appeal to an SWF.
- ctkrohn 18y ago
  Also curious: what role do you see for Facebook in the mortgage market? It not really the most lucrative area right now...
hugh 18y ago
For all this talk of the $15 billion valuation at which Microsoft invested in Facebook, didn't they get some extra goodies for their money? As I recall there was some kind of exclusive advertising rights as well as the stock. If I sell you a can of coke and a billionth of my company for a dollar it doesn't mean that my company has a billion-dollar valuation.

by aneesh 18y ago

rms 18y ago

In the next two years of Facebook, they could only be acquired as a strategic investment, valued at $5-7B if a large player like Google/Microsoft/Yahoo tries to buy them. Maybe a sovereign wealth fund? Unless those funds stay away from Web 2.0. Beyond that, yes, they'll have to show revenue. Facebook will be a good test of the ultimate stability of the Web 2.0 Bubble. I think their best strategy is to go into the mortgage market, but the consensus of this board seems to be that Facebook won't succeed in the mortgage market.

ctkrohn 18y ago
I highly doubt a sovereign wealth fund would invest in Facebook. Most of their recent equity investments have been in dividend-paying stocks of US banks; they also tend to buy a lot of fixed income assets. Facebook won't be able to pay dividends any time soon, and while I recall them doing a debt offering, I can't imagine it's on the scale that would appeal to an SWF.
ctkrohn 18y ago
Also curious: what role do you see for Facebook in the mortgage market? It not really the most lucrative area right now...

hugh 18y ago

For all this talk of the $15 billion valuation at which Microsoft invested in Facebook, didn't they get some extra goodies for their money? As I recall there was some kind of exclusive advertising rights as well as the stock. If I sell you a can of coke and a billionth of my company for a dollar it doesn't mean that my company has a billion-dollar valuation.