Anybody getting in on the Facebook PreIPO? Hoping it triggers at $35 a share
Are you kidding- Facebook?
At $35 that means that it's valued on par with either Pepsi, Glaxo-smith Kline, Merck, and more than Goldman sacks, or more than Ford and GM COMBINED.
You have to ask what does Facebook offer?
1. Easily accessed information. Is this info worth $30-45/person
2. What is the expansion or other markets?
3. Will it be like Myspace?
4. Privacy concerns
5. Generation Y maturing
6. Infrastructure
My answers to these questions are
1. The information which can be accessed elsewhere is not worth $30-45, or will advertisers be willing to be pay such a premium to access information- my back of envelope calculation says the average they can make per year per person is $0.30. The value of $30/ person is not there
2. Facebook is saturated now- they can expand, but to where? Facebook phone? Charging people? Not everyone is going to use it
3. Look at Myspace, it was big, facebook came along, not Myspace is essentially dead. My opinion is the same thing will happen to facebook, some new fad will come along
4. Facebook is becoming dangerous in terms of privacy to the point where employers are using it as a screening tool- better just to to have it
5. Generation Y is using it, but once they mature and have kids, they will spend less and less time on it and future generations will think of it as "their parents" social media
5. FB infrastructure is server farms- highly devalued in a few years, it's not land, factories, equipment which lasts years. Servers are obsolete after only a few years