> If I gave everyone in the world a $1 every time they visited my site I could also have the most traffic'd site in the world, but that wouldn't make my site worth any money.
Sorry to quibble, but no you couldn't. If you had 7B dollars and you literally made this offer to every person in the world, you still would not get Facebook's traffic.
And in any case, Facebook has a lot more than traffic. Just because their monetization is lackluster so far doesn't mean they don't have a ton of interesting directions to go in. All this hand-wringing and analysts attempting to project a realistic valuation for Facebook is just anguish and sour grapes over being hoodwinked by the hype generated by a bunch of greedy investment bankers.
However if you take all the IPO hoopla out of the equation, and you see that Facebook is still growing, still evolving, and has a lot of unique assets that could propel in the company in new directions. I wouldn't bet against Facebook just because some cranky financial experts want me to believe they know where Facebook is headed. They don't know. Nobody knows.
>I wouldn't bet against Facebook just because some cranky financial experts want me to believe they know where Facebook is headed. They don't know. Nobody knows.
The last two sentences are precisely why analysts are "cranky" and institutional ownership of this stock is so faint.
A reasonable investor makes an investment decision based on the info they have and the prospect of discounted future cash flows. At this point it is clear not even Facebook management really knows where they're headed. Just where the money is. How does a reasonable investor value that? I wouldn't bet on facebook at any price just because they have critical mass on a free social network today.
Edit: What I meant by the last statement was that valuation matters. Obviously there is a price at which Facebook stock is fair or even undervalued.
> Sorry to quibble, but no you couldn't. If you had 7B dollars and you literally made this offer to every person in the world, you still would not get Facebook's traffic.
I'm pretty sure you would. It's a dollar every time they visit the site, not one dollar per person.
Sorry to quibble, but no you couldn't. If you had 7B dollars and you literally made this offer to every person in the world, you still would not get Facebook's traffic.
And in any case, Facebook has a lot more than traffic. Just because their monetization is lackluster so far doesn't mean they don't have a ton of interesting directions to go in. All this hand-wringing and analysts attempting to project a realistic valuation for Facebook is just anguish and sour grapes over being hoodwinked by the hype generated by a bunch of greedy investment bankers.
However if you take all the IPO hoopla out of the equation, and you see that Facebook is still growing, still evolving, and has a lot of unique assets that could propel in the company in new directions. I wouldn't bet against Facebook just because some cranky financial experts want me to believe they know where Facebook is headed. They don't know. Nobody knows.