Facebook says it's worth over $75 billion (rumor)

Facebook says it's worth over $75 billion (rumor)

Summary: Facebook's own estimate of its valuation is over $75 billion. Another number has also been thrown around: $104 billion. Facebook's last unofficial valuation was $102.8 billion.

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The Instagram rumors just keep coming. First we heard Facebook beat Twitter to Instagram. Then we heard Facebook is going public on May 17/24, depending on the Instagram deal. Last night we heard Instagram CEO Kevin Systrom wanted $2 billion from Facebook.

Now, we're hearing more details about how much Facebook reportedly offered to pay for Instagram, and what that means the social networking giant is valued at: over $75 billion. This is up from the $50 billion valuation Facebook valued itself at in December 2010 when it announced it had raised $1.5 billion.

Here's the phrase I use every time I write yet another Instagram article: "Facebook announced plans to acquire Instagram for approximately $1 billion in cash and stock." The words "approximately" as well as "cash and stock" are key.

The latest rumor shows exactly why. Here's a quote from The New York Times:

In early April, Facebook bought the photo-sharing service for $1 billion, agreeing to pay roughly 30 percent in cash and 70 percent in stock, according to people briefed on the negotiations. At that level, Facebook is pegging its own stock price at roughly $30 a share. Based on those numbers, the giant social network is valued at north of $75 billion.

But Facebook could actually be worth more.

During the negotiations with Instagram, the parties framed the deal around a logical assumption: Facebook could soon trade publicly at a much higher market value. As part of the talks, the companies discussed a potential value of about $104 billion for Facebook, the people briefed on the negotiations said. Instagram's co-founder Kevin Systrom first broached the number, one of the people said.

In other words, if Facebook ends up going public at more than $75 billion, it will have paid more than $1 billion for Instagram. That's certainly possible, given that the last Facebook valuation on secondary markets was $102.8 billion, the highest yet.

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Topic: Social Enterprise

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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  • Facebooks value will not be known until after the ipo

    Facebooks value will not be known until after the ipo. Many people are talking about price and the value of FB. Even if Mr. Zuckerberg believes that his company is worth 75B or 110B, it has nothing to do with reality. It will be what the market forces assign it after the ipo.

    People have to understand also that the pps Facebook ipos at will not determine its value either. This is uncharted area and the Wall Street Machine is pumping this like mad.

    The only thing I absolutely know from trading stocks for many years is that FB is going to be a very volatile with a high beta. There is a lot of people on both sides of the bear and bull camps that are looking at this. This will have a lot of option activity and there will be a lot short interest......That we know.

    Mark........he has no idea of the value of the company. He may have a vision of where FB could go. It appears that he is a bit aprehensive and is trying all he can do to get as high a price as possible from FB.

    Most of us will be sitting on the sidelines watching the momentum traders riding the waves.

    Based on value, I would have to say I dont believe that FB can grow into its offering price in a timely manner which would allow people to make a return befitting the risk of this stock. With all this said, a stocks values especially one like FB will not follow value metrics. It will be traded based on the market.
    Techaround