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That would be approx. $94 per active user. I know there have been social networks which went over the counter at that price before, but looking at them now I wo
by tobias3 14y ago
That would be approx. $94 per active user. I know there have been social networks which went over the counter at that price before, but looking at them now I would not touch this stock with a ten foot pole.
I certainly can't think of any way to extract that much money from my account. Ads?
I know that this reflects not the current status but future expectation, but I cannot imagine any way how Facebook can fulfill those expectations. They have nothing, which when taken away would make users hurt. Other social networks stand in line.
- lftl 14y agoDefinitely not buying FB at this price, but the only argument I can see justifying the price is as more a long term valuation of them as a tech company. In other words, in the same way the Google is clearly no longer "just" a search engine, FB has the talent and resources necessary to be more than a social network. That's definitely a gamble on valuation, but I can vaguely see someone justifying the price in that respect.
- runako 14y agoPut another way, Facebook is expecting to be able to create $94 of cash for each of its current active users over the future to eternity, discounted by an appropriate factor. That doesn't seem outlandish: it's $0.80/mo per user of value over 10 years. If they add users, it's less. If they add/extend their product offerings/partnerships/etc., the numbers seem a lot more achievable. That said, I'm not buying the IPO because it seems fully valued already.
- wavephorm 14y agoThere is no way each of their users can possibly be worth that price. They've done a good job at hyping up the company, but from an investment standpoint, it's dead meat. They really need to pull a rabbit out of their hat at this point -- some feature that would make 10%+ of their "consumers" to pay money for a product they offer.