Transfer Pricing Associates

Is Facebook really worth 75 billion euros?

Posted on Friday April 20, 2012

Facebook announced plans for an initial public offering (IPO) that could value the company circa 75 billion euros. At the end of 2011, Facebook had a private equity of almost 3.9 billion euros at a balance total of 4.9 billion euros. These are impressing numbers, but it takes a lot of fantasy to point out the market value at 75 billion euros.

What is your opinion on this?

For more information, please read our newsletters on the IPO of Facebook:

‘Gambling with Facebook’- 8 IPO challenges

Facebook Officially Announces Plans to Go Public

Facebook Considering 2012 IPO


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Comments on 'Is Facebook really worth 75 billion euros?' (6)

I don't think so

How do you go from 4,9 billion balance to an estimated 75 BILLION in market value? Who calculates these things anyway?

Posted by Sandra Rhodes op Friday 20 April 2012

I think it can be

I think we have to keep in mind what happend with worldonline ten years ago. Worldonline was one big growing bubble until the IPO where it collapsed. However, Facebook is already making profit and its growing figures are realy promissing. If they can keep this rise in revenue and profit I think it is worth the 75 billion.

Posted by Guyneau de Zeeuw op Friday 4 May 2012

Don't believe the hype

The value of facebook is tied to the hype. In a couple years' time, shares will plummet.

Posted by Ken op Friday 4 May 2012

What Ken says

@Ken: I agree. Who here remembers what happened to MySpace? It died a sudden death when something better came along. Sure collective shares can reach 75B, but they won't stay there...

Posted by Ivy Pereira op Friday 4 May 2012

Reply to Ken

I completely agree Ken, yesterday my friend asked me whether i believed it would be a good investment to buy Facebook shares on the IPO in 2 weeks. I told him i didn't think it was a good idea, i believe that Facebook has already been reaching its peak for a while and from then on it will only either remain stable or decrease. So i don't think it' a good investment..

Posted by Marissa Manning op Friday 4 May 2012

Facebook still has a few tricks up its sleeve

I believe Facebook actually is worth the hype and the 75 million euro IPO price tag. Comparing Facebook to Myspace is wrong in my opinion, because I think where MySpace failed (in adaptation), Facebook has flourished. Every couple of months you look at Facebook, something has changed, and I can guarantee, the company reaps financial benefits from every change. Reports have said that Facebook wants to assimilate a search function into the website much like Google. This strategy could prove incredibly effective as the company could reap 10x the ad sales they currently enjoy. Also, as Facebook expands to other countries, and if China's internet laws relax a bit in coming years, that will be another huge market for Facebook to penetrate, meaning A LOT more ad sales in Asia. To me, Facebook's IPO value of 75 million euros is completely believable.

Posted by Patty op Friday 4 May 2012