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Facebook to Set I.P.O. Price Range at $28 to $35

dealbook.nytimes.com

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Re: Facebook to Set I.P.O. Price Range at $28 to $35

#11

Post by [deleted] »

CyrusL wrote: post #5
nirvana wrote: post #3

Why oh Why is the headline about the stock price? Apple's price is $585ish right now. Apple is not 10 times more expensive than Facebook would be-- only a bit more than 5 times as expensive. Facebook's price range is around $86B. It seems a lot of people want to buy a car for a "monthly payment they can afford" and car dealers have long sold people terrible terms and terribly overpriced cars by structuring the "month…

Because Facebook hasn't split it's stock in a while, so talking about price per share has a common meaning for everyone that owns shares. I would imagine the majority of people who own Facebook shares know exactly how many shares they own and not an exact percentage of the company.

[deleted]

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#13

Post by debacle »

jstalin wrote: post #6

Looks like a stock price of $31.50 would give facebook a P/E ratio of around 60. For comparison, GOOG is 18.5 and AAPL is 14. More financials are available from the updated S-1: http://sec.gov/Archives/edgar/data/1326801/00011931251220819... And it looks like Q1 2012 net income was actually lower than Q1 2011. Oops!

The net income is marginally different and the gross revenue is almost 50% more. I don't think you're giving it a fair assessment.

Also, Google's IPO P/E was ~80, and shortly after IPO the P/E shot up to 160, so again I don't think you're giving Facebook a fair assessment.

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#14

Post by hkmurakami »

nirvana wrote: post #3

Why oh Why is the headline about the stock price? Apple's price is $585ish right now. Apple is not 10 times more expensive than Facebook would be-- only a bit more than 5 times as expensive. Facebook's price range is around $86B. It seems a lot of people want to buy a car for a "monthly payment they can afford" and car dealers have long sold people terrible terms and terribly overpriced cars by structuring the "month…

>How about "Rather than the $100B expected, Facebook is set to IPO at around $86B".

I wonder what the people who bought FB shares in the secondary market at nearly $100B valuation are thinking right now. (Though I guess the stock is bound to pop on opening day)

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#16

Post by igorsyl »

nirvana wrote: post #3

Why oh Why is the headline about the stock price? Apple's price is $585ish right now. Apple is not 10 times more expensive than Facebook would be-- only a bit more than 5 times as expensive. Facebook's price range is around $86B. It seems a lot of people want to buy a car for a "monthly payment they can afford" and car dealers have long sold people terrible terms and terribly overpriced cars by structuring the "month…

You are right from a technical point of view. However the psychology is very different.

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#17

Post by tobias3 »

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.

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#18

Post by jpdoctor »

nirvana wrote: post #3

Why oh Why is the headline about the stock price? Apple's price is $585ish right now. Apple is not 10 times more expensive than Facebook would be-- only a bit more than 5 times as expensive. Facebook's price range is around $86B. It seems a lot of people want to buy a car for a "monthly payment they can afford" and car dealers have long sold people terrible terms and terribly overpriced cars by structuring the "month…

> Why oh Why is the headline about the stock price?

That should tell you everything you need to know about the buyers.

It's gonna be a sheep shearing.

Re: Facebook to Set I.P.O. Price Range at $28 to $35

#20

Post by lftl »

tobias3 wrote: post #17

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 th…

Definitely 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.
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