Comments on: Facebook, Facebook Get Ya Facebook Shares at 80% off

By: JoeDuck

JoeDuck — Sun, 29 Jun 2008 05:58:00 +0000

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?

By: FoolsGold

FoolsGold — Sun, 29 Jun 2008 05:45:49 +0000

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.

By: amuse

amuse — Sun, 29 Jun 2008 02:40:49 +0000

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.