Friday, February 11, 2011

Google's (GOOG) Soon to be Ex CEO Obviously Reads FMMF as He Says Signs of Internet Bubble Forming.... as Facebook Valuation Jumps $10 Billion in 4 Weeks

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It was just a month ago that Facebook's value was placed at $50B per the Goldman Sachs private placement offering.  Well folks, that was last month.  This month... $60B.  You can do the math from here - $10B a month from here, as we do QE3-7 until it is worth more than the GDP of Germany.

I see Google's (GOOG) Eric Schmidt has been reading the website, as he agrees with me we're entering a new bubble - this time 1999's eyeballs have been replaced by 2011's 'friends' or 'followers'.'

  • There are clear signs of a new Internet bubble in corporate valuations, Google's chief executive Eric Schmidt said in an interview with a Swiss magazine on Thursday. 
  • Asked about the high valuations being put on companies such as social network company Facebook and game developer Zynga, Schmidt said in an interview with Bilanz: "There are clear signs of a bubble ... But valuations are what they are. People believe that these companies will achieve huge sales in the future."

This is true... valuations were what they were in 1999 as well.  Until they were not.   As an aside, I just want to let everyone know I am adding a social networking arm to FMMF - hence the valuation of this website will instantly go from $8,210 to $12 billion.  Boo yah!


As for Facebook, which now goes up $10B a month?
  • Facebook Inc. is considering letting employees sell as much as $1 billion of their shares in an offering that would value the company at almost $60 billion, according to two people with knowledge of the matter.
  • A stock sale would allow large institutions to invest in the social-networking company, according to the people, who declined to be identified because the deliberations are private. 
  • Facebook recently raised $1.5 billion in a financing round from Goldman Sachs Group, and Digital Sky Technologies, valuing the social network at $50 billion. Neither Goldman Sachs nor Digital Sky will participate in the new offering, said one person familiar with the matter.
  • The stock sale would give a windfall to employees as they wait for an initial public offering.


Knowing how the herd of lemmings works, if Facebook came public today at $60B you know people would be falling over each other to buy the IPO and it would probably be worth $120B in minutes.  Hence if Facebook comes public in 2012 at $150B it should be worth more than Apple in the first few minutes of trading.  No bubble here baby.  100x sales is cool, and 200x sales would be better.

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