Facebook to cheque bookon January 30th, 2012 at 10:06 am
With facebook’s IPO imminent, it would look like the Gold rush is ready to start. I’ve no doubt, that on the first day of trading, there will be an absolute frenzy on buying these shares and people trying to make a quick buck.
The question is, will these share’s be worth their ‘face’ value. In other words, will these be worth what the share price reflects or will it be another dotcom bubble which will see share holders holding pieces of paper that are worth far less than what they say.
Reports suggest that the company will be valued at somewhere between $75bn (£48bn) and $100bn. Really? How the hell do they work that out. Net profits of $355m on revenues of $1.2bn in the first nine months of 2010 turns into $100bn how?
Most of the revenue from facebook is in advertising, which is being hit big time at the moment, due to the economic climate we’re in. I reckon what we’re seeing, is the age old way the stock market is run, sentiment. I think there’s going to be a massive backlash on social sites with regards to privacy (or their lack of respect for it).
Do yourself a favour if you are going to buy these shares. Make a quick profit and get out.
facebook displaced the likes of MySpace and Bebo, and I think there will be another one along to do the same to facebook.