Goldman Sachs invests in Facebook at $50 Billion valuation • Hacker News Board

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#61

Post by flipbrad » Mon, Jan 03, 2011, 9:46 AM UTC

This deal comes 6 months after AOL (an experienced tech player, mind you) sells Bebo for about $10m rather than the $850m it spent to acquire it. The context is markedly different, of course, notably since Facebook was the reason for the collapsed value over at Bebo.

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#62

Post by jackowayed » Mon, Jan 03, 2011, 9:53 AM UTC

meterplech wrote: post #32

brown9-2 wrote: post #9

Goldman's special purpose vehicle sounds like something you'd design if you wanted to piss the SEC off and get into trouble. Also couldn't help but laugh at this line: The stake by Goldman Sachs, considered one of Wall Street’s savviest investors, signals the increasing might of Facebook, which has already been bearing down on giants like Google. One of Wall Street's savviest investors is investing in Facebook in 201…

More than that- this type of deal could potentially greatly harm current Facebook equity holders, or much more likely potential buyers of the IPO. If Goldman Sachs is both an investor and the bank that eventually takes them public this deal is rife with conflicts of interest. Ex: In order to invest at this "low" valuation Goldman had to promise to set the initial price of the IPO to be artificially high. People buy t…

Shouldn't the bank that does the IPO try to set the price as high as will sell anyway?

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#63

Post by [deleted] » Mon, Jan 03, 2011, 9:57 AM UTC

varjag wrote: post #54

dotcoma wrote: post #48

Earlier quoted context omitted.

simple. every user is worth 100 dollars. Like in the old days of 1999.

However accounted for inflation, it's only $76 of 1999 dollars per user. I'd say at this valuation it's a steal!

[deleted]

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#64

Post by [deleted] » Mon, Jan 03, 2011, 10:09 AM UTC

dave1619 wrote: post #24

Congrats to Facebook and their team. Well-deserved for building a site millions love.

[deleted]

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#65

Post by motters » Mon, Jan 03, 2011, 10:16 AM UTC

I think this is a sign that I should get off of Facebook ASAP. I don't want to be doing anything which boosts the bonuses of Goldman Sachs.

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#66

Post by dagw » Mon, Jan 03, 2011, 10:22 AM UTC

motters wrote: post #65

I think this is a sign that I should get off of Facebook ASAP. I don't want to be doing anything which boosts the bonuses of Goldman Sachs.

By that logic you should stop doing business with any company that Goldman Sachs has invested in, which I think you'll find is just about every major company in the world.

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#67

Post by adrianbye » Mon, Jan 03, 2011, 10:26 AM UTC

brown9-2 wrote: post #9

Goldman's special purpose vehicle sounds like something you'd design if you wanted to piss the SEC off and get into trouble. Also couldn't help but laugh at this line: The stake by Goldman Sachs, considered one of Wall Street’s savviest investors, signals the increasing might of Facebook, which has already been bearing down on giants like Google. One of Wall Street's savviest investors is investing in Facebook in 201…

you laugh, they make major bank.

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#68

Post by iwwr » Mon, Jan 03, 2011, 10:44 AM UTC

ShardPhoenix wrote: post #31

brown9-2 wrote: post #13

Earlier quoted context omitted.

I'm curious, why would a company "need to settle" at a certain P/E ratio?

If a company is not growing anymore, the only reason to own shares is to get dividends. If the P/E ratio is too high, then the amount of annual dividends per dollar of share won't be worth the risk of the company going bust.

A company does not need to pay dividends in order to be worth to have a share in it. As long as the assets of the company are stable or growing, owning a piece of it is like having a secure bond. Dividends are either profit sharing when the company can't do anything productive with their extra cash... or attempts by management to keep their valuation afloat in order to collect bonuses.

I'd say that if a company has extra cash, it is better off paying its long term debts rather than dishing it out to the shareholders. Stock valuations rise and fall, but the underlying stability of the company should be worth more.

Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#69

Post by sdghrjty » Mon, Jan 03, 2011, 10:50 AM UTC

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Re: Goldman Sachs invests in Facebook at $50 Billion valuation

#70

Post by sdghrjty » Mon, Jan 03, 2011, 10:52 AM UTC

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