Facebook's Revenues Leaked

eldavojohn writes "Think that Goldman Sachs spent too much on Facebook with the $450 million investment? Well, a very wealthy customer of theirs decided to leak Facebook's financials yesterday after receiving it over lunch: '... during the first nine months of 2010, Facebook generated $1.2 billion in revenue. Net income at the firm was $355 million. The financial statements were not audited and offered little detail about how Facebook generates its revenue, said the source, who did not want to be identified because he had signed a non-disclosure agreement.' Expanding this nine-month period to a year yields $1.6 billion in revenue and under half a billion in income. Given that, should Facebook be valuated at $50 billion?" Reader frontwave adds news that other social tech companies are hurriedly considering IPOs of their own.

more of a $5 billion company

[Anonymous Coward]

a rocksolid stable company like Walmart pays 2.24% dividend out of profits ($4.5 Billion on a valuation of $200 billion). A less stable company like AT&T pays 6% ($10 billion OUT OF PROFITS on a marketcap of $170 billion). Growth companies have the same sort of profits or larger, but they tend to reinvest all of the profits in expansion so they don't pay dividends.

If you think Facebook has as solid a future as AT&T, then at $50 Billion valuation Facebook would need to see $3 billion in excess PROFIT. So, they are tremendously overvalued by today's alleged revenues of $0.5 billion. The only outstanding question is whether they can grow to much greater than $3 billion profits in the next year. I don't see that happening, you are free to smoke whatever crack you can find.

Facebook may be approaching maturity

[Animats]

Facebook may be maxing out on number of customers. They have 500 million accounts. Tencent's QZone, in China, is slightly larger; Facebook isn't going to take over China.

If they're near max growth, they have to be priced as an ongoing concern, and should have a P/E around 15 to 20. (Microsoft's P/E is around 12, Apple is around 21, Google is around 25.) So if net income is $355 million, market cap should be around $7 billion.

$50 billion, no way.

Re:SEC

[KhabaLox]

Read Matt Taibbi's blog post [rollingstone.com] over at Rolling Stone. They are using what's called a "Special Purpose Vehicle." Basically, the SPV invests in Facebook, and Goldman's hand-picked clients invest in the SPV. You don't have to disclose financials if you have less than 500 investors, and the SPV only counts as one.

Re:Nothing admirable here

[timeOday]

The source signed a non-disclosure agreement, on the basis that he was trustworthy, and then disclosed the document anyway.

I prefer to say, "the investor made a revision to their privacy policy."