My disdain for Facebook’s valuation is (clearly) no longer an outlier perspective. When the cover of Barron’s declares FB to be worth “about $15,” it means that this has become fairly uncontroversial viewpoint.
The table below is very much along the lines of what I discussed previously (here and here).
Table comparing Facebook to Apple and Google
Previously:
5 Questions for Facebook Investors (January 12th, 2011)
Questions for Facebook IPO Investors (February 1st, 2012)
What Is Facebook Really Worth? (February 12th, 2012)
Less than meets the eye at Facebook (February 18th, 2012)
How Facebook Fucked Up Its Own IPO (May 22nd, 2012)
Source:
Still Too Pricey
Facebook has a business model in need of a radical change and a still-rich $61 billion market value. What’s not to “like”? Plenty.
ANDREW BARY
Barron’s SEPTEMBER 22, 2012
http://online.barrons.com/article/SB50001424053111904706204578002652028814658.html
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
how about in these metrics ? I don’t care myself – its an App I like – but you’all seem to need it to perform for you – in the singing tone of Audrey II “FEED me”
stock market share – profits – retail sales
(maybe how about external driven sales – if thats even possible)
having said that – I wonder what App would drive the masses to suck up bits & bytes if it were not Facebook – the fashion of the day .. for shallow me TBP, YouTube, Google, HuffPo, Wiki, imdb, with a few other hits
…. and who pays the electricity and storage bills ? never mind, its ME, in everything I consume
(same of that dead tree version that ran this story – tho I haven’t touched one in _ ? ever)
I know I’m a FB outlier: when I use FB I don’t see any ads, thanks to ad-blockers; and I have never updated my mobile FB client so no ads there either. Not everyone can or would resort to do that but am sure my dislike of ads isn’t unique. Think about it: FB’s lean interface had beaten Microsoft’s slow social uptake, as well as many other ad-ridden & irrelevant-ridden but valiant attempts. Becoming less social and more commercial will take FB closer to the norm.
BR writes ” My disdain for Facebook’s valuation is (clearly) no longer an outlier perspective”
Question: will the disdain for Facebook (the company, not the stock) will no longer be an outlier?
Is FB is worth $15 or $18? $23 or $28? 20% over or 20% under. To me this is simply laughable because nobody know not only how FB will evolve, but more importantly whether or not the FB users will actually use the site! Is FB the next Google? The next (stagnant) Yahoo? A hacker-led cult that has no business being in serious business?
I think the discussion should not be whether or not FB is 20% overpriced, but about the factor of magnitude: $4 or $40? Between $2 and $8 or between $20 and $80?
Also, I can’t help but cringe when i hear CEOs spew out words like “social”, “mobile”, “cloud.” – all the buzz-words. How is it different from “internet incubator”, “bee to bee” and “dark fiber” from 1999? Or take the “rare earths” of 12 months ago? So when I hear Zuck talking “mobile” , I can’t help but start looking at shorting the inevitable short-term “pop”
Finally, IMO, the most important data in the Barron’s pierce is not even about FB. It’s the comparison of FB, AAPL, GOOG, LNKD and AMZN. Of those five companies, FB is NOT the outlier!
What I don’t understand is with the way the control structure of Facebook is set up (Zuckerberg is in control) why he should care about the stock price. About the only reason is if he wanted to aquire something and pay with stock. Zuckerberg et.al. have pulled off one of the great coups of all times figuring out how to extract the maximum amount from Wall Street they could. Since as the prospectus shows Facebook is a controlled corporation with Zuckerberg having over 50% of the votes for directory, why should he care at all what the market thinks?
Duh. FB was from day one worth about that. I always said it was a decent deal at $10, but I wouldn’t even buy it at that price. It may not be losing users, but a lot of people don’t log on much, and they really are probably pretty close to a high-water mark sometime in the next few years.
Fakebook like Fonzie jumped the shark with its 100 Billion IPO. It looks as fake and stage-managed as a virtual college reunion that is too crowded and more and more nobody goes there anymore except Corporations looking for coins in the sofas. What’s the discounted present value of an STD? Fifteen bucks for a round lot.
When the lovely pollen fades, the bees go elsewhere.
Of course, knowing the value of taking the other side of Barron’s, one might be inclined to back up the truck on FB on Monday.
[...] Barron’s Covers Story: Facebook Is Worth $15 Per share – at least so far. [...]
I bought a few FB 30 SEPT puts, which I closed at quite a tidy profit — enough to pay for more than a few car payments for the wife’s SUV, which carries around my most treasured belongings: my kids. I’m still long FB puts for the November (i.e., short) when 1.15 Billion new share are released from the IPO lockup. If FB approaches anywhere near $15, the Jeep is paid off. HA!
My valuation puts FB at about $8. ($4 cash/share + a few bucks monetizing the non-fake users…)
Of course, I worry that Barron’s — being the ultimate contrarian indicator — I should buy protective calls @ about $30. ;-)
Re ToNYC: Of course Facebook the company now has the money in the bank. As noted they made out like bandits, and took wall street for a ride. (Turnabout is fair play every once in a while) Partly of course its the old fashioned way IPOs are handled that is responsible. What if an online reverse auction were conducted for an IPO, investors can bid so much for so many shares. When the time comes you go down the list until a bid is reached that including all bids above the amount results in the desired number of shares being sold. That last price is the sales price. After all Facebook did make an IPO do what it should do raise the maximum for the company. Who cares if the investors make money afterwords, in particular with a good corporate control structure?
Barron’s, welcome to the party….! A little bit late, but welcome…..!
Without double digit growth, FB could be worth only $9. I an very many others never see web advertising thanks to Ad Blockers and Tracking Protection, now built-in to IE which, I suspect, is never factored in. It would be very interesting to see an in-depth study on the cost effectiveness of web advertising which takes such factors into account as well as “buy conversion rates” etc.
Farcebook…Fakebook….whatever you want to call it….is worth $0….let’s see in two years. Side bet anyone?
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@Lyle Says:
Exactly. They might have well shot the company since at that 100 Billion level for cool smoke and hope, they are as underwater as Atlantis’ real estate forever.