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May 3, 2012 10:43 pm GMT
We are hearing from bankers underwriting Facebook's initial public offering, that it will IPO at a $70 to $90B valuation, or $27-$35 a share. While that's still going to be a landmark valuation for a consumer Internet company going into the IPO roadshow, that's down from the $100 billion benchmark that had been speculated about.The reason for sub-$100B valuation is the sequential quarter-over-quarter revenue decline going into the first quarter, "If y/y rev growth had accelerated, we could be talking LinkedIn multiples. Plus LI has expanding margins, which FB doesn't," said a source. Investors are a little concerned that Facebook's is too aggressively priced considering its growth trajectory. Google didn't have its first cyclical quarter until it had a $16 billion annual revenue run rate. FB is still at one-fourth of that, on a 12-month trailing basis. The company made $1.058 billion in revenue in the first quarter of 2012. That was up 44.7 percent from the first quarter a year earlier, but down 6.5 percent from the fourth quarter.
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/sDePaqA0IvA/
Bankers Lower Facebook IPO Valuation Due To Revenue Decline
We are hearing from bankers underwriting Facebook's initial public offering, that it will IPO at a $70 to $90B valuation, or $27-$35 a share. While that's still going to be a landmark valuation for a consumer Internet company going into the IPO roadshow, that's down from the $100 billion benchmark that had been speculated about.The reason for sub-$100B valuation is the sequential quarter-over-quarter revenue decline going into the first quarter, "If y/y rev growth had accelerated, we could be talking LinkedIn multiples. Plus LI has expanding margins, which FB doesn't," said a source. Investors are a little concerned that Facebook's is too aggressively priced considering its growth trajectory. Google didn't have its first cyclical quarter until it had a $16 billion annual revenue run rate. FB is still at one-fourth of that, on a 12-month trailing basis. The company made $1.058 billion in revenue in the first quarter of 2012. That was up 44.7 percent from the first quarter a year earlier, but down 6.5 percent from the fourth quarter.Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/sDePaqA0IvA/
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