
Report: Facebook IPO in early 2012, for $100 billion+ - koenigdavidmj
http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2015308776_report_facebook_ipo_in_early_2.html
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byrneseyeview
This is not really a story. The 500-shareholder rule stipulates that companies
must start releasing data 90 days after the end of the year on which they pass
that threshold. That's why FB did the Goldman deal at the beginning of the
year--so they'd have the maximum time possible during which they could operate
as a private company while still doing a raise that put them over the maximum.

And the $100bn number is also not much news. There's a liquidity premium for
trading on the public markets. The highest LinkedIn trade on the private
markets was less than half of their lowest post-IPO valuation. FB can't expect
the same premium, but 20% is not a stretch.

Employees have been grumbling about illiquid stock since, well, long before
Facbeook existed. That's one of the big reasons companies go public; it was a
big reason for Microsoft's IPO, for example.

Basically, you could have written this story on the first working day of the
year.

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hugh3
But hey, the fact that it's still true is news.

Not as big news as "Facebook expected to IPO at $300 million" or "Facebook
expected to IPO at $30 million" or "Facebook declares bankruptcy" or "Facebook
closes down social networking site and will IPO as steel manufacturer", but
news nonetheless.

Personally I'm rooting against it purely on the basis that the few facebook
employees I've met have been annoying twats and I don't want them to become
rich. But I admit there's a bigger picture here.

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aspir
I know this is flawed logic and doesn't account for a number of variables,
but:

The most surprising fact in this article is that, if this is true, Facebook is
essentially 1/2 of a Microsoft in terms of valuation. As much has Microsoft
has been lagging over the past few years, I just don't think that Facebook is
1/2 of a Microsoft at this point. Maybe 1/5 of a Microsoft.

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Retric
Based on a sane P/E and assuming strong revenue growth and minimal risk
Facebook should sit around 1/15th of a Microsoft. If they can hit 10billion /
year in revenue in 3-5 years they might be worth ~1/3 of Microsoft but IMO
anyone buying Facebook at 100billion is an idiot or banking on the greater
fool theory when there are not all that many fools left.

PS: IMO, the odds Facebook will be worth 400 billion in 5 years is much worse
than the chances it will be worth less than 25 billion in 5 years. Buying a
sock with no dividends in sight, a strong chance of losing 75+% of it's value
and little real room for growth is a poor long term prospect. In the short
term day traders may be irrational but the market is a fickle beast and can
turn on a company vary quickly.

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dkl
Interesting juxtaposition with this:

[http://www.insidefacebook.com/2011/06/12/facebook-sees-
big-t...](http://www.insidefacebook.com/2011/06/12/facebook-sees-big-traffic-
drops-in-us-and-canada-as-it-nears-700-million-users-worldwide/)

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xcode
If Facebook's profits touch $1Billion this year (as is expected), the
valuation of $100 billion puts it at a P/E of 100. Thats high, but not too
high for a growth company (Amazon has a similar number). In fact, the forward
looking P/E (assuming Facebook might make $2 billion next year) is a
(relatively) low 50. Google has a P/E of about 15. One of the reasons that the
P/E is so low is the belief that Google has grown a lot, and wont grow much
more.

To be honest, this is somewhat of a disappointment. The companies that solve
'hard', core-tech problems like Google and Microsoft are falling behind. Sad.
Sad.

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hugh3
Sad, or a good buying opportunity? I bought some GOOG the other day because,
damn, P/E of 15? I'll take that!

GOOG can't expand its userbase much more (since it's already, to first
approximation, everyone on the planet), but it can certainly find new ways to
give 'em stuff they're willing to pay for.

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blantonl
Google reminds me of how a jet plane takes off and reaches cruising altitude.
What ground breaking significant product releases has Google brought to market
in the past 2 years? That might explain a P/E of 15.

Google is being properly judged by the investment community now that the IPO
has passed and the "hype" has faded away.

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tapp
> What ground breaking significant product releases has Google brought to
> market in the past 2 years?

Off the top of my head (although it's not technically a single product
release) taking mobile OS market share from low single digits to just shy of
40% in under two years strikes me as a pretty significant accomplishment by
any reasonable standard.

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blantonl
Are there any sources out there for net income results for Facebook? Even
estimated?

There are rumors that Facebook is pulling in between 1.5b to 2.0b dollars a
year in revenue. EBITDA values would be crucial here in determining how good
of an investment Facebook would be.

It will be very interesting, because Groupon is about to approach the open
market with some very dubious, if not scary EBITDA numbers.

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edwardunknown
Until congress passes some sensible data farming legislation, that is.

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chopsueyar
The beginning of the end...

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tuxidomasx
A billion dollars isn't cool. You know what's cool...?

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nextparadigms
I don't think Facebook is worth more than $20 billion, at most. Where's the
revenue to back that kind of number up?

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hugh3
Last I heard they were pulling in $2 billion a year, so $20 billion would
definitely be on the low side.

$100 billion is still high imho (though I've been wrong before, and previously
thought they were crazy for turning down _one_ billion), unless they come up
with a better way to monetize their huge userbase in the next six months.

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jonknee
What's revenue have to do with anything? P/Es are based on earnings, not
revenues.

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byrneseyeview
FB's operating margins are extremely high. The usual number I hear is 40%+,
with each marginal dollar of revenue contributing about $.60 in operating
profit.

