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Is Facebook overvalued? POLL

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  • View Poll Results: Is Facebook's stock overvalued?
    Yes
    82.35%
    No
    17.65%

    • Thread Starter
    • 13 followers
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    $38 a seems a completely mad price to me for a company that is incredibly likely to fail, ultimately.

    I see no reason why Facebook won't be the next MySpace or Bebo - I imagine another social network could easily become the new fad for a while at Facebook's expense.

    What do you think?
    • 7 followers
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    I don't know much about business but facebook sure is declining in popularity among people I know, so if that's representive of everyone then i agree that there's little difference between it and bebo/myspace. People are getting sick of facebook..
    • 47 followers
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    It's hard to say. I am assuming people are investing on the basis that there are ways they can turn their rather poor profitability around. If they can't do that then yes it is, massively.
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    It's difficuilt to predict it's future, right now my facebook news feed is full of pictures of cartoons...which kinda indicates it's failing, or my friends are extremely sad

    I think if they launch new things - I've heard rumours of search engines to video platforms - it could be worth the $104 billion...

    Probably worth more than greece now though..
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    This makes me wonder what will be next. Eventually Facebook HAS to fail and there will be something better, but what? Facebook has been with me for so long, since I was 13 and to switch to another social network will be too hard, especially since not many of my friends will be on in.

    I know one day I too, will leave Facebook for something better but I don't have the imagination to see what it will be.
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    I think Facebook is more dug in to the web experience than MySpace or Bebo were, so the comparison is a little bit off. The real issue with Facebook is not that they aren't super-significant right now, but what their real asset is. Their asset is member information and member loyalty. At the moment, their "customers" are those advertisers who they can target onto those members. The problem is that the more they try that, the more the members are going to resent it. So far, Facebook has coasted on a bubble of hype where the advertising focus was not nearly as intrusive, persistent and manipulative as it needs to be for it to make the kind of money to justify such a huge price. Members are going to resent that more and more. They are going to seek alternatives.

    Comparison with Google is closer, as Google has done well, but in fact Google is under-performing in relation to its share capital and I can see the price going down there long-term as well.

    Amazon, PayPal and Ebay are all similarly afflicted; despite the vast capital and surging sales and market share, all of these Big Web companies are struggling to turn the level of profit the markets demand.

    There will probably be other threats as well; Amazon is already attracting some scrutiny for neo-monopolistic practises; Google has been under fire in many territories. Facebook is currently a global monopoly and I can't see the authorities leaving that untouched for ever as they try and carve up the advertising space for themselves.
    • 52 followers
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    Yes. People are getting hyped over nothing they understand about.

    You will make much greater profits elsewhere, this media lead tripe about FB being "so great" is rubbish.
    They just want you to buy shares into it, so those companies who sell it make a huge profit compared to all of you.
    (If you didn't understand that - then don't take economics)

    And remember don't be a sheep.
    • 4 followers
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    Clicked wrong button I meant to click yes. With regards to the question, facebook is worth nowhere that much if assets held are anything to go by. We must, therefore, assume that there are other, more theoretical reasons as to why it is valued at $100 billion dollars. Many people believe that it has the ability to grow further despite the fact that it is losing a lot of revenue on account of mobile phone users (who don't see the ads that constitute the majority of Facebook's revenue). Facebook's stock price will, at some point, plummet once people realise that it is worth nowhere near the amount of money that its stock flotation says it is but by that time all of the major shareholders (except for Zuckerberg) will be long gone.
    • 3 followers
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    I don't know. And nor do you.
    • 0 followers
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    overvalued maybe but facebook won't fail
    • 32 followers
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    (Original post by Aspiringlawstudent)
    $38 a seems a completely mad price to me for a company that is incredibly likely to fail, ultimately.

    I see no reason why Facebook won't be the next MySpace or Bebo - I imagine another social network could easily become the new fad for a while at Facebook's expense.

    What do you think?
    They have the potential to be incredible, they have such a big market. An astonishing fact is that they only earn $5 per user at the moment, if they think of ways to just increase this slightly it will have a massive impact on their revenues.
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    (Original post by Just Josh)
    I don't know much about business but facebook sure is declining in popularity among people I know, so if that's representive of everyone then i agree that there's little difference between it and bebo/myspace. People are getting sick of facebook..
    you shouldn't care about facebook. You should care about being a better fifa player. You played ******* **** tonight (again)
    • 1 follower
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    Facebook is far bigger than Bebo or Myspace ever were the main difference is the likes of Bebo and Myspace were mainly used by teens and young people in general, Facebook however is everywhere I remember when it was just people my age on it then my parents, aunts, uncles etc.. started to join now even my grandparents who are retarded when it comes to technology have their own facebook account for that reason it will not dissapear like the others yes teens and kids move on from fads but adults don't.. I could see it branching out into new markets i.e into Asia or developing it's own search engines or fully integrating into Twitter it's got loads of room for growth and development so it's valuation is fair.

    Edit:

    Don't get me wrong I despise Facebook it's the most pointless attention ****e that just screams look at me that people talk about on it, it also stops you going out a lot of the time and I would love it to die completley but I just don't see it happening.
    • 7 followers
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    (Original post by electriic_ink)
    I don't know. And nor do you.
    This. They aren't declining in the UK/USA, they just aren't gaining more popularity but in developing economics they're rising.
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    So profits were about a billion $ this year? I can't see where all this profit expansion is going to come from. Even with some dodgy assumptions, a NPV of 100 bn would need net profits of more like 5bn to justify such a high price (5bn income streams at a 5% discount rate over an infinite horizon).

    Id say it is over valued.

    On a purely qualitative note, all this talk of making history and breaking records and making dreams come true (for staff) etc. It all screams bubble to me. Its mediaspeak for "this time is different" "its a new paradigm" etc etc.
    • 30 followers
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    I believe its worth more than Boeing so yes way way too much
    • 10 followers
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    I use Google + as it is easier to make conversation with people (strangers) relative to my hobbies. I can then tailor my YouTube videos to each 'circle' depending on which content is most relevant, thus garnering more hits.

    Facebook is also banned in China. China's answer is DaoDao, which I have been wanting to become a member of for a few months now. Still trying to work out how to sign up though, as I can't speak Chinese. :rolleyes:
    • 3 followers
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    Probably. But you can't really compare it to MySpace, it's way more popular than that site ever was.
    • 5 followers
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    (Original post by Just Josh)
    I don't know much about business but facebook sure is declining in popularity among people I know, so if that's representive of everyone then i agree that there's little difference between it and bebo/myspace. People are getting sick of facebook..
    bebo + myspace only succeeded because at the time there was nothing else, but then when facebook came along it gave people a much better alternative.

    Currently the only thing is twitter, but IMO it isn't a replacement for FB, and I don't think that FB will flop in the same way some of the earlier social networking sites did, they have the money to keep people interested and using it. Like the instagram takeover.
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    Everyone who is on Facebook should get a fiver as part of the launch frenzy.

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