By the Numbers: Facebook’s Road to an IPO
Graphic courtesy of Column Five Media
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Graphic courtesy of Column Five Media
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The graphic implies a revenue multiple of 17+ based on the SecondMarket data. That figure is high, though it is reasonable to assume some sort of pre-IPO premium. I’d still argue a $9.5B valuation is a bit generous.
Good luck to Facebook in 2010, whatever happens.
My $.02.
Best.
Curtis
If they do manage to hit about $700 million in revenues, they can get about 10 times revenues valuation — that is essentially the value of large Internet companies. So my guess is that on the downside they can get about $7 billion and on the upside they can easily get about $10 billion. It is not an exact science, but I have heard those numbers from various different people in the valley.
In light of their recent changes in the default privacy settings, I would say their traffic has peaked.
I don’t think the privacy issues will do facebook in, it is the dependency on social gaming, (primarily Zynga) .
If you notice Zynga and Fb are starting to share the the same large-scale investors.
How long until FB gives better / more data to Zynga?
Good points Lenely. My guess is that they are more beholden to Zynga than people realize. Some say that they are getting over $50 million in revenues from Zynga, which is about 1/7th of their 2009 estimate. I am not sure if those numbers are accurate, but if they are, well that’s a lot of dependency.
the privacy issue is a big deal for anyone who put up pictures of family and children on facebook with the expectation of privacy. its like a bank that suddenly decides its default account settings is for “everyone” to see your finances. and as with a bank, you cant just delete all your financial records. you can only “deactivate” your facebook account. that means they have all your data. maybe tomorrow they will decide that the default for deactivated accounts is to display them anyway. facebook just got sued over it.
Interesting… 7.5 – 10 billion seems reasonable.
Mark
They should wait until they get to 1 billion per month in revenue. it will be a monster IPO if that happens
Interesting comment about two classes of stock great for early investors, but I don’t class B public shares have a good performence record over history.
neat, another bubble!