
Perspective: Facebook Is Now 5th Most Valuable U.S. Internet Company - terpua
http://www.techcrunch.com/2007/10/25/perspective-facebook-is-now-5th-most-valuable-us-internet-company/
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mxh
"...and a massive stock valuation. They can make acquisitions of key
technology and talent without spending much."

I don't agree with this. There's no liquidity in the stock, and just because
MSFT thinks the company should be valued at $15B, I don't see why I should, or
should expect anyone else to.

Wouldn't a $15B valuation make their (newly-issued) stock options _less_
attractive to new employees, since they would only be in-the-money if Facebook
IPO'd with a (kinda high) $15B valuation _by the public markets_?

It's a bit of a different question for acquisitions, in which they can trade
stock outright. Still, to do a deal, it seems they'll have to buy at very high
valuations, giving their own highly-valued stock out in return. So it should
still cost them (about) the same %age of FB to acquire a company post- and
pre-investment.

It's certainly not _bad_ to raise a quarter-billion dollars in exchange for
1.6% of the company, but I don't see how this makes their stock much more
valuable to an independent observer; without liquidity, it's still anyone's
guess. Granted, people will probably guess higher now, but I still don't see
that valuation as a free ride to low expenses.

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andrewf
I don't think it makes sense to apply "total_valuation = microsoft_price /
microsoft_stake". There are a load of wishy-washy things Microsoft could be
looking to get out of this - a seat on the board, knowledge, position,
credibility, yada yada... I doubt they're in it to make a direct return on
their $240 million investment. You could probably add or subtract $100,000,000
or 1% from the figures involved and it wouldn't affect whatever Microsoft's
trying to do.

