If Facebook’s worth $96 billion then Apple’s worth $2.7 trillion
THE big thing in the tech investing markets at the moment is the long awaited Facebook IPO. This is where they actually bring the company to the public markets and let the general public try to buy a piece of it.
The valuation they’re trying to put on the whole company is $96 billion. Which is, if we’re honest about it, a pretty heady price for what is essentially a website, even if it is one with 900 million users.
What this valuation assumes is that:
1) It’s going to work out how to make really good money from advertising on the site.
2) It can grow as fast as it has done for the next 6 or 7 years.
3) That no one else at all is going to create a social network that captures some of its business. You know, like Facebook didn’t do to MySpace, Friends Reunited, Bebo and all the rest.
And, even given all of that it’s still a pretty heady price. If we valued Apple the same way Facebook is being then, well, as the Wall Street Journal says:
But Hamilton maintains Facebook has a valuation problem. He even attempts to put Facebook’s valuation into perspective by comparing it to Apple, the most valuable company by market capitalization in the world.
“If Apple, which manufactures tangible products, was valued at a multiple comparable to Facebook, Apple’s market capitalization/value today would be approximately $2.7 trillion,” he says.
As of Wednesday’s close, Apple had a market cap of $532 billion, according to FactSet Research.
It is all a bit overblown, don’t you think?