Facebook IPO: Valuation Multiple Higher Than 99 Percent of S&P 500

May 4, 2012 2:43 pm

We have written multiple posts on Facebook valuation – we had one in-depth analysis of the issues with Facebook valuation. We spotted this today:

“Facebook Inc. (FB) is betting its growth prospects will persuade investors to pay 99 times earnings for its initial public offering, a higher multiple than 99 percent of companies in the Standard & Poor’s 500 Index.

The high end of the proposed valuation would make Facebook more costly than every member of the S&P 500 relative to earnings except for Amazon.com Inc., Leucadia National Corp. and Equity Residential, data show. While 27-year-old Chief Executive Officer Mark Zuckerberg has amassed more than 900 million users since starting Facebook in 2004, his challenge is to stem slowing sales growth amid increasing competition from Google Inc. (GOOG) and Twitter Inc.”

Statistics Source: Bloomberg

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