Just a word about company valuations, and the amount paid my Microsoft yesterday for a small, 1.6% share of web 2.0 pioneer Facebook; $240 MILLION?? That sets the valuation of Facebook at an astounding $15 billion. As a way of comparison, that sets the value of Facebook higher than the market cap of the following Fortune 1000 companies: Weyerhaeuser ($14.89B), Heinz ($14.8B), Marriot ($14.73B), CIGNA ($14.4B), Safeway ($13.89B), Campbell Soup ($13.7B), and Macy’s ($13.66B). Now, I am unsure how the rest of the world feels, but that seems a bit high to me by way of comparison. Microsoft’s (NASDAQ: MSFT)market this morning was a little over $292B, with an EBITDA last year of over $20B.
Looking at Facebook's 50 million registered users, many analysts and investors apparently disagreed with me, as MSFT rose on the news of the acquisition. Microsoft has been looking to more effectively gain market share and monitize Google's cash cow, the online advertising market. It seems that investors are looking at this as just the way for Redmond to make that happen. Most analysts conotinued to maintain positive outlooks for the software giant's stock.
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