Is Facebook Worth $50B?
January 31st, 2011 | by Jen |Facebook is not worth $US50 billion, according to a poll of global investors that shows skepticism about Goldman Sachs’ recent estimate of the largest social networking site’s value and concern that a bubble may be forming in the technology sector.
Sixty-nine per cent of investors say Facebook is overvalued after Goldman Sachs invested $US450 million in a deal that put the company’s worth at $US50 billion, according to the quarterly poll of 1000 Bloomberg customers who are investors, traders or analysts. Only 10 per cent of respondents say Facebook’s valuation is appropriate; 4 per cent say it’s worth more.
The Bloomberg Global Poll conducted January 21-24 shows that investors disagree with Goldman Sachs’ assessment that Facebook is worth more than web pioneers such as Yahoo!, the biggest web portal, and eBay, owner of the biggest online retail marketplace. Palo Alto, California-based Facebook surpassed Yahoo! in October as the third most visited website in the world.
“Those investing in Facebook, expecting it to be the next Google, might be in for some bad news along the way,” says poll respondent John J. Lee, a portfolio manager at PGB Trust & Investments in Morristown, New Jersey. Mountain View, California-based Google went public in August 2004 and the shares more than tripled in the first year to $US279.99 from $US85. The stock price averaged $US617.2 this month.