Starting what will be either the greatest modern American story of greed, or the Zuckerbeast finally meeting his Waterloo, Facebook filed for an IPO yesterday.
So far, they’re being fairly modest, filing for a $5 billion valuation. But Sean Parker can’t whine about how rich he is to Occupy protesters with just a couple of hundred million, bro! The ultimate goal is a valuation of $75 to $100 billion…which is where that whole “Waterloo” part comes in.
It’s like this: Facebook’s growth, to this point, has depended on new users, and when you have nearly one-seventh of the planet signed up for your website, new users are hard to find.
And if you look at the site’s money flow, a $100 billion valuation just isn’t there. Facebook made $3 billion last year, which is pretty impressive — but then you compare it to Google, which made $37 billion last year.
Don’t get us wrong: Facebook is a big deal, and it’s worth billions. It has some areas of real growth. But nobody stays golden forever, and being a publicly traded company is very different from being a privately held one. We won’t be surprised if Facebook’s initial valuation is a lot higher than what the free market turns out to think it’s actually worth.
(Image via Thos003 on Flickr)