I simply do not understand Facebook and all these other huge social networking companies that do not even seem to bring in significant revenue based on their value (facebook seems only just starting to actually run like a profitable company?)…it is valued at $50 billion :shocked and has turned down sick offers in the past.
At what point do you F’in sell?..Sure to reach its peak soon and fizzle?
Do they ever go public?
After it goes public Zuckerberg’s wealth will probably double is my guess…So it makes perfect sense that he is waiting…He is being advised correctly…
Facebook is awesome… much better than myspace (and I used to LOVE myspace).
^ Quality post by me. :beer
Seems like he is trying to avoid going public altogether…but you think its inevitable, and the smart move?
Hi,
In all actuality I don't understand why he continues to take investment capital unless he is actually building a corporate owned facility in the Bay Area of California?
There 2010 estimated revenue is 1.23 Billion, but were talking California here, probable the worst place to start a National / International business as California not only has a very high cost of living, high cost of doing business and has a state tax, and a franchise tax board.
So Facebook is probable expending close to 50% in taxes against net income, and Facebook is probable expending in California an average of $200k per employee (1000 Employees) which includes employer contributions, benefits programs, bonuses, etc. (Hard & Soft Costs)
Then they must be paying in Palo Alto California $15 to $40 per square foot per month for facilities and California has one of the highest cost rates for Insurance and operating cost’s. So with that said there probable only net profiting somewhere in the $350m to $400m range.
It used to be that a private business was evaluated as being worth between 4 and 8 times net profit, and a publically traded company was doing good to trade at 15 to 20 times net profit. (Shared as dividen’s)
That tells me Facebook is only worth between $1.6b and about $3.2b as a private business and somewhere between $6b and $8b as a publically traded company!
I think the over evaluation of Facebook value is going to bite them in the a_ _ as there is nowhere to grow profits and supply investor growth in a public market.
GR
I just read this article yesterday that seemed to address some of the points you discussed here:
http://news.yahoo.com/s/ap/20110107/ap_on_bi_ge/us_facebook_investors
any company growing as fast as facebook has to have a LOT of cash, they are trying to recruit a lot of the people from google, and that means paying massive amounts of cash to get them to leave stock options they have at google.
It may seem like facebook is a simple operation, its not, and to start maximizing revenue it will take a lot of cash,
After they go public they can simply “print money” by issuing new stock, until then its more complex to raise the cash they will need,and they need a lot of it
I retired from Yahoo after spending years as director of a company Yahoo bought out (broadcast.com)
andy
Ahem. They are building their corporate owned facility in Prineville, Oregon.
5.4 billion a search just read…so was that a good buy for yahoo?
actually it was 5.7 billion (it depends on how you convert the stock),it was a horrible buy for yahoo,they bought us at the height, and didn’t have any idea what to do with us,within a few years that had dismantled the whole operation,
I was with Yahoo until the day my last broadcast.com option vested,then I was gone,Yahoo management was very smart, but no street smarts…