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Facebook shares reach new low; $50 billion in market value lost

Facebook Stock Price

Facebook shares scraped a new low
Tuesday. The new drag on the already leaden stock:
Analysts from two of Facebook’s largest
underwriters on its botched initial public
stock offering cut their price targets.

 

So How Much Is Facebook Worth? The Financial Times Has Concerns

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.

Senh: The big question is ad sales. It's not as easy Financial Times think it is. Historically, click-through rates for social networking and community sites (forums, chats) have been significantly lower than the average content site. Facebook and Twitter haven't shown that they've been able to move click-through rates up. Unless than can come up with a new form of advertising, it's gonna be tough for their revenue to improve significantly.

 

Wow. Just… Wow: Facebook Hits Record $75 Billion Valuation On SecondMarket

Last week, in our weekly report on the insanely hot Facebook stock trading going on behind the scenes on SecondMarket, I wrote the following: "Do I hear $75 billion next week?" I was sort of kidding.

Senh: A lot of people will be losing money. It's way overvalued. That's 75 times annual revenue.

 

Why Facebook Is Worth $35 Billion

Sorting through all kinds of filings and other technical gobbledygook, the guys at the Private Equity Data Center say their new best guess for Facebook's internal valuation is $35 billion.

 

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