Bucks for Zucks Paper Billions Watch

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Why do companies keep lowballing facebook? Zucks can't figure it out. He's got the lofty, world-changing rhetoric and strangely consistent fashion sense down (one man's black turtleneck is another man's sandals). You would figure that the ridiculous offers should just fall in line with the expectations of the VC investors that have chugged the most Kool-Aid. Simple market bubble physics 101.
Unfortunately for paper coffers in Silicon Valley, it seems potential acquirers only want to pay a 20x revenue multiple for facebook, opposed to the 60x+ multiple the company wants. Insiders like initial investor Peter Thiel think the company is worth $7-10 billion, which would give Zucks a nice $2-3 billion to buy sandals with. Viacom recently valued facebook at $3 billion. The discrepancy will most likely force facebook to stay single until an IPO.
Facebook is expected to make $150 million this year (you read that correctly). With the addition of well marketed widgets and rapid tween growth, revenue is sure to surge to several billion dollars next year (says the irrational bubble buyer of old), or at least a couple hundred million bucks in the real world. That's less than $4 per user. Getting a certificate for the purchase of 30 million un-monetized eyes (with notoriously low ad response rates) isn't as satisfying as getting an actual revenue stream, and tweens have fickle loyalties.
Facebook to remain swinging single [The Deal via DealBook]

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