Facebook IPO valuation is tagged @ $100Billion making it one of the largest IPO launch in history. Personally, I think that this is a BIG Hype. At $100 billion total value Facebook will be trading at a Price to Earnings multiple, or P/E, of 77 and Price to Sales multiple of around 25. A significant chunk of revenues come from casual video games developer Zynga, which brings in 12 per cent of all revenue.
Google’s IPO worked for long-term investors because the search engine literally became one of the best companies on earth. Google’s price has gone up 7-fold since the IPO but the company has grown into it’s expensive initial price. Can Facebook replicate the success story? Now this is a big question mark..
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Now that everyone on earth has offered their 2-cents on the upcoming Facebook IPO, one question remains: Should you buy shares when the social networking king becomes a publicly traded company sometime in April or May?