Facebook, Facebook Get Ya Facebook Shares at 80% off
TechCrunch is reporting that an insider at Facebook is shopping his shares at 80% off the normally quoted (and probably absurd) 15 billion dollar valuation. TechCrunch is also suggesting that even Mark Zuckerberg is willing to sell shares at a price consistent with a 6 billion valuation for the company.
Like Arrington, I’d also like to take one share of Facebook. For me please add a Coke and a Cheeseburger.
The 15 billion never made any sense, and as it becomes clearer that social networking won’t monetize well their perceived value may quickly drop below a billion, though that would still be one heck of a payday for Mark Z and the gang.
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I would mention the obvious. The employee stock being sold at a 3 billion dollar valuation is common stock (i.e. no anti-dilution, no full ratchet, no preference). The stock that sold at a 15 billion dollar valuation is preferred stock. Common stock is not worth as much as preferred stock. As time goes on the two will reach parity, but for now I wouldn’t pay for common stock in Facebook at a 1 billion dollar valuation.
One can differentiate between Common and Preferred stock or engage in a variety of minor comparisons, but the fundamental point is still the same as when the price of a tulip bulb in Holland rose disproportionately to value produced by skilled labor. The tulip bubble burst. So too will these Social Networking Monetization Bubbles.
Amuse it wouldn’t seem to me that would account for much value difference – under 10% unless you really think they are going to jerk the common stockholders around which seems unlikely at this point?
FoolsGold – what?! Are you saying those dusty Holland Tulip bulbs in a jar from old Uncle Christiaaaaan Andreessson aren’t worth $800,000?