Joe Duck

Have Blog. Will Travel.

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.

June 28, 2008 - Posted by | advertising, facebook, investments | , ,

3 Comments »

  1. 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.

    Comment by amuse | June 28, 2008 | Reply

  2. 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.

    Comment by FoolsGold | June 28, 2008 | Reply

  3. 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?

    Comment by JoeDuck | June 28, 2008 | Reply


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