Mark Zuckerberg. (Photo by Robert Scoble via Flickr.)

Facebook has the Internets abuzz this week in advance of its IPO announcement. It is coming with plenty of speculation: Is the wunderkind of Silicon Valley worth its reported $105 billion valuation?

We’re wondering, would you buy Facebook stock, its value tottering between $34-$38 per share? In a piece today in the The New York Times, even MIT profs are questioning if the giant can cash in on its wealth of information: “We know Facebook has an awful lot of data, but what they have not worked out yet is the most effective means of using that data for advertising,” said Catherine Tucker, a professor of marketing at the Sloan School of Management at the Massachusetts Institute of Technology. “They are going to have to experiment a lot more.”

In a blow to FB’s mo’ money week, GM announced that it would pull its ads from the site, telling the Wall Street Journal  “their paid ads had little impact on consumers’ car purchases.”

In an AP-CNBC poll, about half, 51 percent, of Americans think FB would be a good buy. And 31 percent of Americans say that the smart money is not on FB’s future. Strangely, that same poll said that people who had seen The Social Network had a more favorable impression of CEO Mark Zuckerberg than those who had not seen the movie.

What do you think? Is FB a good buy?

Previously on GeekWirePoll: Mark Zuckerberg’s hoodie, thumbs up or down?

Molly Brown is a writer and editor who comes from an arts and culture background, including stints at Billboard Magazine and Kirkus Reviews. An avid blogger on all-things culture, she covers a wide range of fun, geeky topics on GeekWire's Geek Life beat.
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Comments

  • Guest22

    Their last Quarterly reports were down.

    They’ve admitted they have no mobile strategy or solution (other than spending wads of cash).

    They bought a zero-revenue company for a Billion dollars.

    Their valuation is somewhere around a 100x P/E where it should be closer to 12-15x.

    History has shown what happens to internet consumer destinations (From Compuserve, to AOL, to Yahoo, to MySpace).  

    And, yup, that little thing about GM pulling paid advertising out?  When their entire business (81% of it) is ad revenue based?

    IMO, the real problem is that they will get a Billion dollar valuation.  Then, over the next 18 months, reality will kick-in.  And, if Facebook collapses (think other “too big to fail” scenarios), the ecosystem that it will take down with it will impact hundreds of businesses.

  • Guest

    Turn the clock back to 2004 and look at all the people who thought it would be foolish to pay $85, a princely sum in those days, for a share of this little company called Google at IPO time. Today, that $85 share is worth about $600.

    Using the Google growth chart, Facebook will be worth about $268 a share in 2020. Of course, hindsight will also be 20/20.

    • Victor

      Revisionists like you need to study up on market valuation vs. stock prices alone. Google came public at a valuation of $25B not $105 like FB. This is the kind of pitch boiler room brokers give to seniors. 

      • Guest

        Honestly, I don’t think anyone really understood what Google was in 2004. Facebook has a much more well-understood product, hence the higher initial valuation, but what out there wouldn’t cause it to rise to Appley levels of worth in the next eight years?

        • Victor

          Apple has real revenue and profits to justify its current valuation and market worth, which is insanely low compared to FB. FB has comparable revenue to Google when it went IPO, but nowhere near the margin Google had at the time. To make matters worse, it is priced at 4X higher than Google’s IPO valuation. So one can make up their own mind whether this is a good deal right now. 

          I think you are mixing valuation vs. market value. What matters to investor return is not absolute market value, it is valuation that matters. Let’s do a simple exercise to see how FB’s valuation is right now: if FB can get to Apple’s profitability of somewhere in the $40B range, based on its currently multiple at IPO, then FB will have a future worth $4 trillion! Or if you were to price Apple in the same valuation of FB at IPO, Apple should be worth $4 trillion. So what’s out there that wouldn’t cause it to rise into infinity? Gravity and sanity. 

          • Guest

            Wow, $4 trillion! That’s pretty amazing. I knew Facebook was on a rocket ride up, but a forty-fold increase in eight years is fantastic.

            Thanks again. I know where I’ll be on Friday.

  • http://profile.yahoo.com/WW4LPEVEIPM2FKU5MJHOODMR7Y Court

    You are making a serious gamble on Facebook’s promise to, one day, figure out how to monetize what it has.  The problem with this gamble is it is at a higher premium than ever before (including Google) meaning that alot of people are already in on the gamble an those not part of the IPO are taking an even bigger risk.  Hats off if it pays off for those who do go in, but the reward won’t likely justify the reward.

  • http://twitter.com/mtishenko Mark Tishenko

    FB really needs to figure out a better way for advertisers to engage with the community. It has more potential than Google if they do it right.

  • Shaun Hall

    Overvalued on hype. FB is at its peak in terms of its business life cycle. It’s decline is on the near horizon. Id buy on the private market pre-IPO and sell on the surge created by the IPO. Since I can’t do that, I’m out. Focusing on growth stocks, like the 17% gain I had in the last 3 weeks on AKRX.

  • Mike Mathieu

    The diversity of opinion on the survey makes me think that the price may not be a bubble, but an actual reflection of future potential, esp. if the survey sample audience is reflective of the investment committee. A bubble price would be indicated if the vast majority were all-in.

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