Facebook Valued Higher Than eBay and Yahoo!
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Based on secondary market transactions, Facebook is now worth $33.7 billion, making the privately held company worth more than longstanding Internet giants Yahoo! Inc. (NASDAQ: YHOO) and eBay Inc. (NASDAQ: EBAY), according to a report from The Financial Times on Tuesday.
Investors are scrambling to get a hold of part of the world’s most popular social network, as common stock in Facebook is trading as high as $76 per share ahead of a yet to be announced initial public offering that has the potential to be larger than the $1.67 billion by Google Inc. (NASDAQ: GOOG) in 2004.
The delay by Silicon Valley companies like Facebook in making an IPO has not swayed the appetite from investors, as they are buying up stakes in technology companies while they are still private, in an effort to profit when they com public.
Facebook has indicated that it may not file for an IPO until at least 2012, but employees and investors are free to sell their shares in the company, and many are taking advantage ahead of an IPO.
The company’s valuation has Facebook executives concerned. According to the Financial Times report citing people close to the matter, the secondary market shares are inflated due to the stock’s rarity, and the company’s value has been determined without Facebook being forthcoming with its financial performance.
As a private company, Facebook must keep the number of shareholders with stock in the company to no more than 500, while the Financial Times report indicates that the company is not close the that level.
Chief Executive Officer, Mark Zuckerberg and his company are also refusing to buy back shares and instead assigning that right to existing investors.
Investors are scrambling to get a hold of part of the world’s most popular social network, as common stock in Facebook is trading as high as $76 per share ahead of a yet to be announced initial public offering that has the potential to be larger than the $1.67 billion by Google Inc. (NASDAQ: GOOG) in 2004.
The delay by Silicon Valley companies like Facebook in making an IPO has not swayed the appetite from investors, as they are buying up stakes in technology companies while they are still private, in an effort to profit when they com public.
Facebook has indicated that it may not file for an IPO until at least 2012, but employees and investors are free to sell their shares in the company, and many are taking advantage ahead of an IPO.
The company’s valuation has Facebook executives concerned. According to the Financial Times report citing people close to the matter, the secondary market shares are inflated due to the stock’s rarity, and the company’s value has been determined without Facebook being forthcoming with its financial performance.
As a private company, Facebook must keep the number of shareholders with stock in the company to no more than 500, while the Financial Times report indicates that the company is not close the that level.
Chief Executive Officer, Mark Zuckerberg and his company are also refusing to buy back shares and instead assigning that right to existing investors.
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