If Facebook Is Worth $100 Billion, Google Looks Cheap

By Steve Birenberg NEW YORK (Minyanville) -- The latest quarterly earnings season continues to be the dominant influence on Wall Street, but a few other events have imposed and impacted trading in media and communications stocks. In particular, the Facebook IPO filing has taken center stage. Facebook will not begin trading for a couple of months, but an active market for the shares in private transactions strongly suggests that when it does come public, it will be valued at near $100 billion. Growing more than 50% annually with $3.5 billion in revenues and over $1 billion in operating profit, $100 billion is extremely generous but probably about right given historic valuations of major Internet IPOs. I have received a lot of questions from friends and clients about buying Facebook, but with the stock likely to rise sharply from its IPO price, taking the valuation well north of $100 billion, it is hard to make a recommendation. More from Minyanville Can Facebook's Lowliest Millionaires Afford to Settle Down? Wireless Broadband, Mobile Still Driving Media Industry Verizon and Redbox Take a Shot at Netflix, Facebook Faces Its Critics Basically, until it starts trading, we do not know what price you will pay for Facebook. Unless you are very wealthy and an important client of one of the underwriters, you will not be able to buy Facebook at the IPO price. I would buy it at the IPO price but probably not too much higher. ...

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