Strong Possibility of Facebook Going Public Next Week // Discuss
- Thread starter sumohax0r
- Start date
I know that Facebook has great customer data and that's going to monetize very well, but I wonder whether Facebook has lasting power against competition.
They control a big chunk of social, but it's such a disruptive market that i'm concerned Facebook will not retain control. They are a one-trick pony in a very unstable industry.
Apple, Google, and Amazon have all done a great job at diversifying into multiple big and profitable markets.
Google seems really invested into Google +, so there's potential for serious competition to Facebook's social network.
Now, don't get me wrong, Facebook is putting up impressive revenue numbers, with 2011 estimates exceeding 4 billion. But, Facebook is trying to go public with a 75-100 billion dollar valuation. So let's look at the Price to Earnings ratio.
75 Billion: 18.75
100 Billion: 25
For Comparison, Apple's PE is 12.75, Google's is 20.
So, as you can see, this valuation is already pricing in a significant amount of growth in revenue.
I'd have to look at Facebook's books to confirm, but my guess is that Facebook Ad revenue is >80% of it's total revenue and it's growth acceleration is declining.
IMO, Facebook is going to need significant revenue from other channels to grow enough for stock prices to rise. You really should think of where Facebook is at in 2 years.
2014 Revenue Numbers:
$>10 Billion: Decent Buy
$<10 Billion: Bad Buy
I don't think Ad Revenue will be $>10 Billion by 2014, so they need another revenue channel and soon. I don't think FB Credits is it.
They control a big chunk of social, but it's such a disruptive market that i'm concerned Facebook will not retain control. They are a one-trick pony in a very unstable industry.
Apple, Google, and Amazon have all done a great job at diversifying into multiple big and profitable markets.
Google seems really invested into Google +, so there's potential for serious competition to Facebook's social network.
Now, don't get me wrong, Facebook is putting up impressive revenue numbers, with 2011 estimates exceeding 4 billion. But, Facebook is trying to go public with a 75-100 billion dollar valuation. So let's look at the Price to Earnings ratio.
75 Billion: 18.75
100 Billion: 25
For Comparison, Apple's PE is 12.75, Google's is 20.
So, as you can see, this valuation is already pricing in a significant amount of growth in revenue.
I'd have to look at Facebook's books to confirm, but my guess is that Facebook Ad revenue is >80% of it's total revenue and it's growth acceleration is declining.
IMO, Facebook is going to need significant revenue from other channels to grow enough for stock prices to rise. You really should think of where Facebook is at in 2 years.
2014 Revenue Numbers:
$>10 Billion: Decent Buy
$<10 Billion: Bad Buy
I don't think Ad Revenue will be $>10 Billion by 2014, so they need another revenue channel and soon. I don't think FB Credits is it.
I've always thought for a long time a lot of people would invest in facebook with a mob mentality. What do you think?
just because they're filing for an IPO does not mean they are issuing stocks.
You won't be able to purchase shares for another 6 months.
You won't be able to purchase shares for another 6 months.
I agree, I see the big boys that have been in the game really reaping the rewards off this IPO.. Its the biggest IPO ever, its going to gain a ton of media attention and I can see a FUCKLOAD of new, uneducated investors entering the game just because they don't want to miss another Google.
Shares will probably soar for a few months then heavy sell offs / shorts and 1000's of new millionaires will be born.
/2cents
(once public shares are issued of course)
Shares will probably soar for a few months then heavy sell offs / shorts and 1000's of new millionaires will be born.
/2cents
(once public shares are issued of course)
Yea, this is exactly what i've been anticipating. Groupon and Linkedin both sucked balls for IPOs, their trends i could not have predicted. But it sure would be sweet if Facebooks IPO trended this way.
I told myself like a year ago i'm gunna dump all the money i have into it when it goes public. The key will be to exit once that bitch peaks.
GLD and SLV have taught me a thing or 2 about bubbles.
Prediction, massive hype stock will gain around 20% in the first four months and then a massive sell off with the stock hitting ~75% of the pre IPO price.
myspace and facebook aren't even close so ppl need to stop comparing them
800 million users is no fucking joke. i don't think i'm in the minority when i think facebook has staying power.
i don't think it's going to die off and become a dinosaur. If they left it like it is today, then it would decline, but they're going to keep innovating.
they are so entangled in peoples daily lives its retarded.
This is true ^ Groupon and Myspace (was) cool and all but its no Facebook. I wouldn't even put them in the same category, Facebook has over HALF its users use the service daily, Thats like 1000000000000x more user interaction then any other service (excluding twitter who is the closest (they have 100m users, 40m log in daily but only 20m out of that 40 actually share content)) That user interaction rate is what will keep ad sales strong, and I'm sure they will be adding new ad sales models after there public offering to boost even more revenue per share.
Will facebook soar for over a year? probably not, will people make shitloads of money off there stock over the next 8-10 months. Most likely.
Many people ignore that gambling might actually become legal in US. If that happens, Facebook will beat revenue targets hands down.
would love to buy FB stock while its HOT.
would love to buy FB stock while its HOT.