Facebook Humbly Sets Its Value At Up To $96 Billion

Facebook, a clever little startup that lets people “friend” each other or something like that, is set to go public on May 18. In advance of its initial public offering, the company led by a plucky, big-dreaming college dropout announced today that it’s worth as much as $96 billion.

That’s not the largest valuation for a company at the IPO stage, the Wall Street Journal reports that it’s also close to current valuations for veteran biggies like McDonald’s, HP and Amazon.

According to the Washington Post, the $96 billion number is worth 24 times the total sales for Facebook’s year ending March 31. When Google went public in 2004, it’s $23 billion valuation was only five times its annual revenue.

But while Google had an established, proven advertising platform to build its business on, some worry that Facebook, while wildly popular, is still an unknown quantity to the people it expects to sell to.

“The bigger issue [with Facebook] is the core business,” one analyst tells the Journal. “There’s still no good understanding for what advertisers are paying for.”

Regardless, Mark Zuckerberg and crew expect to sell off 337.4 million shares at $28 to $35 each.

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  1. Fafaflunkie Plays His World's Smallest Violin For You says:

    How coincidental! Apple Inc. just happens to have $96 billion in the bank right now. What ya say there, Kim-Cook-un? Wanna make Mark Zuckerberg your bitch? Seems awfully tempting…

    • maxamus2 says:

      You don’t understand the stock market, do you?

    • cbutler says:

      Since the 90’s Apple rarely makes dumb investments such as facebook. I think there is way more hype then there really is to this up and coming facebook stock and think its reached its peak as far as attention and users goes.

  2. umbriago says:

    I just don’t know, Facebook….what do you make, exactly?

    Oh, I know you make money – you sell ads, and collect and sell data on people who give away their personal information without regard for the consequences and collect their internet use habits…I know all that. Yet you don’t make tangible. You don’t have any factories. In the end, what good are you, Facebook? I have trouble thinking you’re a good investment. You look like a pretty good bubble.

    • ronbo97 says:

      Yes, that’s exactly what they make: good tech bubbles ! Large ones at that.

    • SabreDC says:

      If tangibility is a prerequisite, then what do companies like Comcast/NBC Universal, Viacom, CBS, etc. make? If you gathered allllll the corporations in the United States, I’d bet that more of them make intangibles (including music, movies, entertainment, telephony, technical services, consulting, etc.) than tangibles.

  3. BradC says:

    Another tech bubble? Unpossible!

    • Jawaka says:

      Mark my words, at least with Facebook its coming. We’ve seen how quickly MySpace withered away. As soon as someone comes out with a better alternative or even when people just stop caring any more there’s going to be a whole lot of unhappy Facebook shareholders out there.

  4. Latentius says:

    Should’ve just rounded up to $100 billion for the heck of it…

  5. Blueskylaw says:

    So a company that makes its money from changing its terms of service at will, selling your private information, the inability to terminate accounts without first manually deleting the content, selling you crops that don’t exist then pestering your friends about it, collect data from affiliate sites even when the consumer opted out and even when not logged into the Facebook site is worth $96 BILLION DOLLARS???

    The following is also how Mark Zuckerberg feels about you, its “product.”

    ZUCK: yea so if you ever need info about anyone at harvard
    ZUCK: just ask
    ZUCK: i have over 4000 emails, pictures, addresses, sns
    FRIEND: what!? how’d you manage that one?
    ZUCK: people just submitted it
    ZUCK: i don’t know why
    ZUCK: they “trust me”
    ZUCK: dumb fucks

    How soon can I take a short position on this “company?”

  6. Southern says:

    Just wait until their single largest revenue source (Zynga) leaves them in 2015 for their own platform that they’re building..

    *POP*!

    Zuckerberg will be long gone to the Swiss Alps by then, though.

  7. Shouhdes says:

    I have a feeling a lot of small investors (non institutional, 40 hour week type people) are going to lose a large portion of money after investing in this at the IPO stage.

    • YamiNoSenshi says:

      Yeah, the growth it would need for any kind of decent return is nigh ludicrous. And that kind of growth just isn’t sustainable. It’s like a one company bubble just waiting to burst.

    • Velifer says:

      Small investors don’t get to participate in IPOs.

      • Costner says:

        On what planet exactly? I’m a small investor and I have the ability to buy into IPOs all the time. In fact I’ve actually done so.

      • Shouhdes says:

        Are you serious?

        I can buy into IPO’s through my Etrade account right now.

        • Bsamm09 says:

          You can buy facebook stock? Before it hits the market? I am surprised. I need to check my etrade account as the only IPOs I’ve seen offered were very small ones.

      • dolemite says:

        I was under the same impression…regular peon come in after the initial IPO.

      • Blueskylaw says:

        As Facebook Inc. files for what is likely to be a historic initial public offering of stock, a big question looms for its millions of loyal users.

        Will they be able to get in on what could be the hottest deal in years — or will they be left with their noses pressed against the glass, as individual investors typically are in coveted IPOs?

        Ordinary investors normally are relegated to the sidelines in red-hot IPOs, with Wall Street brokerage firms that handle the deals parceling out shares to hedge funds, mutual funds and some ultra-wealthy individuals that generate big trading commissions.

        Retail investors are left with little choice but to try to buy shares on the first day of trading. Getting a decent price before the stock rises tends to be next to impossible, and most investors miss out on the big first-day surge.

        There is speculation, however, that Facebook may take steps to make some portion of its IPO shares available to small investors, partially as a public relations gesture that could generate goodwill.

    • Shouhdes says:

      I bought VISA when it was an IPO. I don’t know if or when Facebook will actually be open up for IPO bidding, but individual investors do have the ability to buy an IPO of a company that has shares to offer. Now if every share is bought up prior to by large insitiutional investors, well no, then they cant. But that remains to be seen.

  8. Nobby says:

    I’m going to break down an create a FB account one day. My coworkers keep telling me I don’t exist until I do.

    • Dryfus Ranon says:

      Create an anonymous yahoo account and then a facebook account. Make up your name and use friends info for security or just make it up and save all the user names, pw’s, security questions, etc in a text document. Not what I did a month or so ago on a dry erase board.

  9. zantafio says:

    Oh this is going to be such a huge flop…

  10. Dryfus Ranon says:

    Let the idiots buy it up, then play with the way out of the money put options.

    • Dryfus Ranon says:

      Kinda bummed that the Zuck didnt wait till after the IPO for his instagram aquisition and his other buying spree. Just remember, the Zuck has majority interest in FB. And with all the talk of security issues and the loss of younger members due to their parent’s snooping, there is no other way but down for FB. BTW After setting up my FB account, several of IE9 and IE10 settings were changed.

  11. Shorebreak says:

    “…almost 13 million users said they’ve never set, or were unaware of, Facebook’s privacy tools. Around 28% also said they’ve shared all or almost all of their wall posts with audiences outside their friend group.”

    http://consumerist.com/2012/05/consumer-reports-finds-most-people-havent-touched-facebook-privacy-settings.html

    Now this is where the big money is at.

  12. Velifer says:

    “So Mark, what exactly is your product?”
    “Eight hundred million people that will click on anything.”
    “$96 billion is lowball, kid.”

  13. Back to waiting, but I did get a cute dragon ear cuff says:

    “The bigger issue [with Facebook] is the core business,” one analyst tells the Journal. “There’s still no good understanding for what advertisers are paying for.”

    HUH?? Advertisers are paying for eyeballs and hopefully clickthroughs. I believe that facebook scans your posts and will choose to display an ad relevant to the content posted.*

    *Disclaimer- I only run Firefox with Adblock on. Besides all the stupid game requests the closest thing I see to ads is a section with the word Sponsored, but no ads underneath. They few times I hit it with Adblock off or on another browser my eyes start to bleed.

  14. Cat says:

    For a company with 800 million active users, $96 billion is a lot.

    They’re valuing each user at $120. Because in the end, their product is YOU.

  15. Press1forDialTone says:

    Funny, the combined punitive and compensatory
    damages that Facebook will have to pay once
    the members whose privacy is now a thing of the
    past wise up and file a class action suit is exactly
    $96 billion!

    I knew that little voice in my head staying to steer
    clear of any web service whose creator puts the
    phrase “Move fast and break things” (Google it)
    into his company strategy statement just prior to
    it’s IPO, was RIGHT. I am not and will never be a
    Facebook member. I guess 30 years in IT did teach
    me a thing or three.

  16. jeffbone says:

    Hmmm…a Dire Straits tune keeps coming to mind…

  17. Nobby says:

    So….how much would you be willing to pay for an account that used to be free?