Mark Ritson’s column declaring Facebook’s stock market flotation share price to be inflated sparked much debate. Read the article here and read comment excerpts below:
Facebook may well have made a mistake by listing at this time – but only because people might believe your old world logic and that might hurt it in the short term. At just over $100 per subscriber, the valuation seems fair. Absurd of you to suggest its revenue model is restricted to advertising. That’s where WPP is more at home.
I agree Facebook is over-valued – it should be more like $75bn – but your comparison with WPP is like comparing Facebook with MacDonalds. WPP is an ad agency, Facebook is not – it’s a media vehicle. If you want to compare Facebook accurately on the basis of potential advertising revenues, you need to compare it with the likes of Reed.
Mark Ritson replies: I agree that Facebook is not valueless, just less value than moronic marketers would have us believe. I think Ivor’s estimate is still over the odds and $25bn is about right. Time will tell.