According to media buzz, it looks like Facebook’s IPO may fetch a valuation of $75 billion to $100 billion. At least, that’s the implied figure based on the trading on SharesPost — which allows private investors to buy shares in pre-IPO companies. Facebook’s market value is now on the high end of that range, at $98 billion, or roughly 27 times revenues.
That’s actually down a bit from $102.6 billion, from about a week before). And yes, that would mean Facebook is now worth more than ConocoPhillips (NYSE:COP), Amazon (NASDAQ:AMZN) and Abbott Laboratories (NYSE:ABT).
Because investors in secondary markets are subject to an IPO’s lock-up provisions, this generally prevents them from selling stock within six months of a public offering. So, these buyers are really betting that Facebook will achieve a much higher valuation, such as $120 billion or more.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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