Facebook just privately sold 165,000 shares of stock at $25 each ($4,125,000 total), which suggests the total value of Facebook is $56 billion. Just prior to the sale Facebook was valued at $43.1 billion. Three months ago it was valued at under $30 billion, and it was valued at under $11 billion in March of this year (all figures via Bloomberg). There are a couple big reasons the stock may have sold for 30% higher than expected. First, there’s the growth potential. Analyst Lou Kerner estimated Facebook will be worth $200 billion in 2015. He arrived at this number using the assumption that the market for internet advertising will be $110 billion in 2015, and Facebook will get 20% of the pageviews. Add in 2015 estimates for other current revenue streams, estimate a profit margin, and multiply that by 16, and you get MAGIC. *throws glitter*
The second possible reason the stock sold for 30% higher than expected is because “ZOMG Facebook stock BUY BUY BUY!” There may be some irrational exuberance here, considering Henry Blodget estimates Facebook is trading at a P/E ratio of 215 to 430. Even for a technology stock, that’s very high; the current average P/E of technology ETF QQQQ is only 17. The investors may be getting overzealous, but what do I know? I’m just an anonymous blogger.
Speaking of anonymity, Facebook is going to continue making it harder to stay anonymous. They announced they’re integrating facial recognition software with photo tagging, meaning they’ll suggest names for the people in untagged photos based on the software’s best guess. Which is just great if you have a friend who likes to post embarrassing party pics. You can turn off the recognition of your own face by opening your Privacy Settings and altering the field for “Suggest photos of me to friends”, but you may want to unfriend your mom anyway, just to be sure.
- Facebook shares sold in private auction for 30% above estimated value. (SAI)
- Analyst claims Facebook will be worth $200 billion in 2015. (SFGate)
- Facebook stock selling at a P/E of 215 to 400. (SAI)
- Facebook is going to add facial recognition to photos, but you can disable it. (LifeHacker)
- Time Magazine declared Mark Zuckerberg their person of the year for 2010, which would be a bold move if this were 2007. (TIME)
- A man in New Zealand has pleaded guilty to a drunken rampage during which he threatened a woman and her child with a knife before stealing a Mr. Whippy ice cream van and throwing ice cream cones at pedestrians. He was still the most sober ice cream man in recent history. (NZHerald)
- According to a couple of SEC filings, Tumblr has raised $30 million from investors, pegging the approximate total value of the company at $155 million. Not bad for a company with only sixteen employees . . . and not enough servers. (TechCrunch)
- Why are venture capitalists pouring so much money into Tumblr? It might have something to do with their pageviews growing 1,540% between October 2009 and October 2010. That’s a lot of “Glee” screencaps. (TechCrunch)
- Tumblr scored number one in Royal Pingdom‘s list of the least reliable blogging services.
- Facebook is likely to generate revenue of $2 billion this year, compared to prior estimates of only $1.5 billion. Insiders claim the company had revenues of $700 to $800 million in 2009. (Bloomberg)
- Picture via ClusterFizzle.