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Anorak | So how much is Facebook really worth then? Let’s see

So how much is Facebook really worth then? Let’s see

by | 4th, May 2012

GIVEN that Facebook is just about to come to the stock markets for the first time, how much is it really worth? The length of string comes to mind, obviously, but your and my opinion is what counts here: the value of a company on a stock market really is just the aggregation of what everyone believes it is worth.

The actual answer is we don’t know but my own impression, along with that of the FT, is almost certainly not as much as a lot of other people seem to think :

How to put all this into a Facebook valuation? To justify the big numbers being tossed around – $100bn and up – several things must happen in the next five to seven years. The business needs to become much less capital intensive (inclusive of acquisitions) over time, as Google and Microsoft have done. That is the easy part. But margins must also stay near today’s level of about 50 per cent – which would be uncharted territory. And sales would have to grow at least sixfold in this period.

All of

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Posted: 4th, May 2012 | In: Money Comment (1) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink