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What is "enterprise value" and how does he come up with 43B?
What if the stock now bounces back? Nobody can deny that the company is generating some solid revenues with lots of potential. Investors might think this is really low valuation and we might see surge in buying. (Disclaimer: I do not own FB stock and this is just my speculation)
I don't see a lot of potential in Facebook. They're just another rung on the ladder of social network churn, and luck may have played strongly into that.
Facebook is generating revenue, but nothing I would consider 'solid' for a company with a ~85 billion market cap.
The company is incredibly overvalued, and time will show that to be the case.
You can't say before the IPO that the company is worth 75 B or 100B and then after the fact say it's their fault for investing at those valuations. That destroys the integrity of the silicon valley investment environment.
This is deceptive. The entire reason the late stage guys invested in higher valuations is because the early stage guys convinced them it was worth more. You can't say before the IPO that the company is worth 75 B or 100B and then after the fact say it's their fault for investing at those valuations. That destroys the integrity of the silicon valley investment environment.
There is now some rethinking of that assumption as more financial information from these brands is made public.
Investors will become more conservative and seek better deals for themselves. I don't think it's anything to do with Facebook. Facebook might just be the excuse they're looking for. My unsolicited advice to all startups is to put your energy into the things which matter. Debating 3-6% more/less dilution with investors is not a good place to be investing your time and energy. I suspect the companies who go into this b…
Could somebody tell me what is Facebook's intrinsic value?
The bigger those multiples are, the more "overpriced" a company is, so it should actually be less attractive of an investment.
From the article: "That means that Facebook's enterprise value is greater than 10x current revenue run rate and greater than 25x EBITDA. These are big multiples folks. I am happy to take those numbers for any company out there." The bigger those multiples are, the more "overpriced" a company is, so it should actually be less attractive of an investment.
Right. The OP is considering the situation as a seller, not a buyer. He would be overjoyed if everything he sells is overpriced similarly.
From what I understand, Facebook's main problem is a lack of a stable income source. It's becoming more and more apparent that advertising is not going to be the panacea that it was thought to be, what with numerous studies showing poor facebook ad performance and companies like GM pulling their facebook ad campaigns altogether. Sure, they booked $1B last quarter, but annualizing that number requires some confidence…
Contrast this with GroupOn, whose product IS the business model...