40B blown up the nose in just a couple of days, that's how wall street rolls.
Facebook shares hit again as valuation doubts rise
41–50 of 60 posts
Re: Facebook shares hit again as valuation doubts rise
#42I'm not really sure why everybody here is so bearish on FB. Sure, its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO. I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit. There is at least a decent chance that FB will refine their business model and turn into a large, stabl…
I think the big stumbling block is that Facebook's growth is getting population limited. That is remarkable to even think about, but they're running out people left on Earth that don't have a Facebook account. So your opinion on Facebook's (financial) value really comes down to how much money you think they can make per user. Their current system seems to be 'show the user ads based on the users hobbies, interests, l…
I think the big stumbling block is that Facebook's growth is getting population limited
I know some people who use Facebook once or twice an hour while others use it once or twice a year. Both of those users are counted the same when people talk about being population-limited.
There's still room for growth, although I'm not about to claim that they are overvalued.
Re: Facebook shares hit again as valuation doubts rise
#43I'm not really sure why everybody here is so bearish on FB. Sure, its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO. I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit. There is at least a decent chance that FB will refine their business model and turn into a large, stabl…
I don't think people are bearish on FB, they are bearish at the current valuation of ~100B.
Say, if the FB IPO was at $1 Billion valuation, then the same people would have been bullish on it.
So, it depends.
Re: Facebook shares hit again as valuation doubts rise
#44Earlier quoted context omitted.
Your approach to estimating Facebook growth by languages supported is interesting but I suspect fundamentally flawed. There's an incredible long tail when it comes to languages spoken, especially when multilingual individuals who speak both an obscure regional language and a more common one are taken into account. http://en.wikipedia.org/wiki/List_of_languages_by_number_of_... gives a great overview of this long tail…
Two things: 1. I wasn't trying to estimate Facebook's growth. I was merely trying to refute the notion that Facebook is running out of people to use their service. My method is arguably quick and dirty, but it makes for a good heuristic, doesn't it? It's enough to tell me that it's probably not worth my time to try and dig up better data. 2. Fine. The number I gave of 6910 probably was too high, but 70 is still less…
Suppose you expect Facebook to grow at 50% per year. How long until you run out of internet users?
50% for the next several years is not an outrageous expectation given their 25x sales multiple. I haven't done the math because I'm both busy and lazy, but I suspect it is actually a good bit lower than what is implied by such massive multiples.
They are indeed running out of people to sign up. On the planet. That is amazing. So amazing, I would argue, that one could imagine governments getting nervous. When's the last time you saw that in a prospectus?
Re: Facebook shares hit again as valuation doubts rise
#45This is one of the most genius moves ever. Bloat the value of the stock to a point where all the current investors can get out and make their money back on the IPO. Once they have their money back it no longer matters weather the truth comes out that actually hitting numbers like 25% growth for 10 years is almost an impossible feat, especially for a company that isn't diverse.
hate to say it but i'm sorta cheering facebook on this time. get one over the street.
Re: Facebook shares hit again as valuation doubts rise
#46Earlier quoted context omitted.
Two things: 1. I wasn't trying to estimate Facebook's growth. I was merely trying to refute the notion that Facebook is running out of people to use their service. My method is arguably quick and dirty, but it makes for a good heuristic, doesn't it? It's enough to tell me that it's probably not worth my time to try and dig up better data. 2. Fine. The number I gave of 6910 probably was too high, but 70 is still less…
Suppose you expect Facebook to grow at 50% per year. How long until you run out of internet users? 50% for the next several years is not an outrageous expectation given their 25x sales multiple. I haven't done the math because I'm both busy and lazy, but I suspect it is actually a good bit lower than what is implied by such massive multiples. They are indeed running out of people to sign up. On the planet. That is am…
I certainly will grant that such a thing is possible. But I will believe what you're saying when I see it.
Re: Facebook shares hit again as valuation doubts rise
#47Earlier quoted context omitted.
Suppose you expect Facebook to grow at 50% per year. How long until you run out of internet users? 50% for the next several years is not an outrageous expectation given their 25x sales multiple. I haven't done the math because I'm both busy and lazy, but I suspect it is actually a good bit lower than what is implied by such massive multiples. They are indeed running out of people to sign up. On the planet. That is am…
I certainly will grant that such a thing is possible. But I will believe what you're saying when I see it.
They won't actually run out of course, but I expect their user growth rate to rapidly approach the low single digits. Which leaves an awful lot of innovating money extraction to provide the absurdly high valuations they've asked for and gotten. Time will tell.
Re: Facebook shares hit again as valuation doubts rise
#48I'm not really sure why everybody here is so bearish on FB. Sure, its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO. I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit. There is at least a decent chance that FB will refine their business model and turn into a large, stabl…
Tell it to Wall Street, Sun Tzu. The user just submitted the story, he didn't write it.
Re: Facebook shares hit again as valuation doubts rise
#49I'm not really sure why everybody here is so bearish on FB. Sure, its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO. I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit. There is at least a decent chance that FB will refine their business model and turn into a large, stabl…
I'm cautiously bullish too. Been planning to write a blog post about this, but I'm in the middle of finals right now. Anyway, summarised: - They still have lots of growth potential in Asia, and other places as more and more of the planet comes online. - Zuckerberg is a Gates-style evil genius. Being grey hat is bad for PR, but good for figuring out monetisation. (cf Twitter, loved by the Valley and make no money). He…
"Might be worth $200-$300 bn eventually" doesn't justify "worth $100 bn now" unless you believe that either:
1. That outcome is highly probable
2. That outcome will occur very quickly (within 2-3 years.)
Let's say we believe the low end of that ($200bn, or 100% growth.) If we believe that will happen in 3 years, that's about 25% growth in market value annually (and a much larger rate of growth in revenues / profits to produce that, since they'll need about a 10X change to balance the multiple compression that will occur as they grow.)
The potential for 25% annual returns isn't anything to sneeze at. But that's what we're saying the "upside" scenario is... 25% stock returns with a company achieving something like 200% growth in profits annually (which seems highly unlikely.) The numbers are pretty unforgiving.
Re: Facebook shares hit again as valuation doubts rise
#50I'm not really sure why everybody here is so bearish on FB. Sure, its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO. I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit. There is at least a decent chance that FB will refine their business model and turn into a large, stabl…
"I'm not really sure why everybody here is so bearish on FB."
Here and everywher 100 Billion $ valuation for FB is nuts.
"its an unproven company with a high P/E ratio, but so are most tech startups when they go IPO."
Startups do not IPO at 100 Billion but at hundreds of times less.
"I think Zuckerberg has shown that he knows how to innovate, grow the company, and even make painful changes that eventually lead to more growth and profit."
Zuck has shown that he is able to make people use their system. He has not show that people COULD PAY for this system for a 100 Billion company.
"Is this some kind of HN Schadenfreude?"
Schadenfreude means enjoying the misfortune of others. MZ and other founders are going to make less bilions for their work in single years, is that misfortune?. I don't think so.
FB valuation is going to be cheaper for those that buy in the future. This is good news.