Facebook employees at the company's Menlo Park, Calif. campus. (Mark Boster / Los Angeles…)
Facebook’s market value topped $100 billion in its final trade last week on the secondary markets before the initial public stock offering planned for next month.
For those keeping track, that’s more than 25 times 2011 revenues.
So how much is Facebook really worth? Is $100 billion all hype inflated by an illiquid market, or do traditional valuation techniques support that kind of valuation?
It’s an intriguing question that has investors reading tea leaves and regulatory filings.
Two analysts — Lou Kerner, who runs a fund that invests in social media companies; and Bo Brukstern, founder and managing director of Arcstone Partners, are bullish on Facebook and say $100 billion is actually too low. They compare Facebook’s growth to Google’s, and say Facebook is where Google was about six years ago.
In a conference call they hosted Tuesday, Brukstern estimated that Facebook’s pre-IPO value is $133 billion and its equity value is $137 billion. He expects the company’s revenue to hit $6.7 billion with $1.85 billion in net income in 2012, and $11.2 billion in revenue and $3 billion in net income in 2013.
He estimates that Facebook shares should be worth about $56 apiece, not the $44.10 they traded in the final secondary auction.
Not everyone on the call was convinced. Kerner and Brukstern fielded questions about the challenges Facebook will encounter in flowing ads onto mobile devices and its perennial Achilles’ heel: privacy.
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