I bet it's worth more than that.
Facebook is not worth $33 billion
91–100 of 266 posts
Re: Facebook is not worth $33 billion
#92Earlier quoted context omitted.
2. That's just not correct. Spend twenty minutes talking to anyone who trades in bonds or equity before you make assumptions about what liquidity you need to get a good price... it's not much. Facebook trades all the time on sharespost, certainly enough to be liquid and to reach a market price. Google itself only has a tiny fraction of the shares available to the public (10% if I remember correctly) and far less than…
Also, Sharepost currently has 3 positions for sale at valuations between 33 and 44 billion. The total outstanding shares for sale represent 0.001% at 44B. That's pretty close to the 0.000000001% that put our $100B valuation on paper: http://37signals.com/svn/posts/1941-press-release-37signals-... But hey, you better snatch these shares up quickly. It's rare that you get a chance to a clear shot at a company where "pr…
If you're selling another 0.000000001% of 37signals, put me down at $10. Being a minority shareholder of 37signals and putting "increased the value of 37signals 10x" on the CV has far more than $10 of cachet ;-) (as Microsoft realized with FB).
Re: Facebook is not worth $33 billion
#93Earlier quoted context omitted.
2. That's just not correct. Spend twenty minutes talking to anyone who trades in bonds or equity before you make assumptions about what liquidity you need to get a good price... it's not much. Facebook trades all the time on sharespost, certainly enough to be liquid and to reach a market price. Google itself only has a tiny fraction of the shares available to the public (10% if I remember correctly) and far less than…
Also, Sharepost currently has 3 positions for sale at valuations between 33 and 44 billion. The total outstanding shares for sale represent 0.001% at 44B. That's pretty close to the 0.000000001% that put our $100B valuation on paper: http://37signals.com/svn/posts/1941-press-release-37signals-... But hey, you better snatch these shares up quickly. It's rare that you get a chance to a clear shot at a company where "pr…
6 orders of magnitude is not pretty close.
Re: Facebook is not worth $33 billion
#94Earlier quoted context omitted.
It's weird, it's like in Chicago they don't have multiplication or something. Oh, and New York smells. (take that!) Two of my heroes dragging discourse on hacker news into the toilet. What's the world coming to?
Both of them have some insights worth pondering, but the attacks are kinda negatively overshadowing the discussion. Joel really shouldn't have started the Chicago hyperbole. Do they have some history or it's just impulsive?
They are competitors.
Re: Facebook is not worth $33 billion
#95Earlier quoted context omitted.
what exactly are they waiting for? They have half a billion users. You know, that is more than America and Russia together, or comparable to the entire population of the geographical Europe. They can only go down hill from here I think. Therefore, personally I certainly would not wait. The truth is really that they do not know how to monetize themselves effectively
No offense but have you taken more companies public than: * Marc Andreessen * Jim Breyer * Peter Thiel because they are some of the directors on the Facebook board, and I think they know their stuff.
Argument to Authority is a logical fallacy.
Re: Facebook is not worth $33 billion
#96Re: Facebook is not worth $33 billion
#97Earlier quoted context omitted.
They're almost certainly making $2 per user. Another dime is gonna be easy.
Haven't got a dime from me, and they don't have an idea on how to.
Also a dime per user/year is more than it seems when you can only collect it through indirect means (ads, charging other companies for using your platform). Remember their ~500mio user figure also includes the overwhelming portion of users who generate no more than a handful of page impressions per month.
It's not like facebook could invent a yearly membership fee or start selling t-shirts or such...
Well, they could, but I doubt more than ~20% of their audience would actually pay.
Re: Facebook is not worth $33 billion
#98Earlier quoted context omitted.
1. Thanks for the word correction, updated. 2. Publicly traded companies have instant liquidity on many more shares, which makes using "last share sold" an meaningful metric. 3. When only 3% of the money a company is supposedly worth has been moved around, it's a poor indicator of what the other 97% would go for. 4. They haven't figured out how to make much profit yet. And it's still questionable whether they will. M…
2. That's just not correct. Spend twenty minutes talking to anyone who trades in bonds or equity before you make assumptions about what liquidity you need to get a good price... it's not much. Facebook trades all the time on sharespost, certainly enough to be liquid and to reach a market price. Google itself only has a tiny fraction of the shares available to the public (10% if I remember correctly) and far less than…
Doesn't it come down to who comes up with the price and what their motivation for investing is?
When a VC invests in a company, they're looking for a big exit. Essentially, they're trying to predict how much the company might IPO or get acquired for. A public investor is trying to predict the rise in future profits of the company. The difference in motivation matters when you consider a hypothetical.
Suppose the company is guaranteed to have stagnant or falling profits. Does that discourage the VC? Not necessarily. They don't care about whether the company can make money. They care about whether they can keep building perceived value in the eyes of anyone who would want to acquire. A public investor, however, would not put their money in that company (at least not for long).
Therefore, I think David's main point is sound - VC's are more likely to over-value your company than the market is. We also know this to be true because of what happened in the early 2000's.
Re: Facebook is not worth $33 billion
#99Earlier quoted context omitted.
2. That's just not correct. Spend twenty minutes talking to anyone who trades in bonds or equity before you make assumptions about what liquidity you need to get a good price... it's not much. Facebook trades all the time on sharespost, certainly enough to be liquid and to reach a market price. Google itself only has a tiny fraction of the shares available to the public (10% if I remember correctly) and far less than…
2. The bond and equity markets are based on sound regulation, transparency, and quarterly statements. Facebook has none of those things when it operates in the dark of the secondary markets. 3. Again, these premiums are based on outstanding shares traded under the transparency of the public stock market. See Secondary Suckers for a nice take on the perils of the secondary market: http://www.homethinking.com/brontemed…
> The bond and equity markets are based on sound regulation, transparency...
Presumably subprime mortgage backed securities are the exception that proves the rule...
Re: Facebook is not worth $33 billion
#100What facebook is really worth we'll know when they IPO and they sell off a majority portion of the stock. Until then it's anybody's guess. I wouldn't buy their stock at any valuation, there are much more solid ways of investing than speculating on something that already feels over valued. And if I would want more risk then I'd rather put my money in start-ups than facebook. The next bubble is here, and it will go the…
That's not correct. There is a secondary market for Facebook stock which is plenty liquid (see Sharespost, et. al).
"In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value.
...
Another elegant definition of liquidity is the probability that the next trade is executed at a price equal to the last one. A market may be considered deeply liquid if there are ready and willing buyers and sellers in large quantities.
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The liquidity of a product can be measured as how often it is bought and sold; this is known as volume."
I don't think any sane investor would consider private shares of Facebook "plenty" liquid. The volume of Facebook trading is so low that when a large trade of it does occur, as in this additional investment that valued it at $33b, the price jumps wildly and it makes news.
As per the secondary market, Sharespost shows the last contract traded on their system being over 3 weeks ago, and that there are only 3 people willing to sell and 5 people willing to buy right now. Those are pathetic numbers.
Granted, shares are not entirely illiquid either. You could sell your shares... but it's a necessity that the more you want to sell, the lower your price is going to have to be to attract enough buyers.