At $38 per share, Facebook’s valuation is over $100 billion and is set to be the largest tech IPO in US history. Initially, many experts anticipate Facebook’s market cap to skyrocket, allowing for substantial short-term investor profits. However, many industry leaders warn that they see Facebook’s true market value to be around $24 to $27 per share, highlighting weaknesses such as: a large percentage of users never click on ads, Facebook lacks a public company culture, and Facebook is unable to effectively monetize a large majority of their mobile user base.
Many of the current warnings and weaknesses I read about Facebook make a lot of sense. As a marketer who has spent a lot of time creating and optimizing Facebook campaigns, there are so many things I wish Facebook would do differently so that I could better serve my clients. To be honest, it is not easy to hit it out of the park with Facebook ads, as it requires careful due diligence, creativity, and constant optimization. Recently, General Motors publically announced their plan to stop spending $10 million on Facebook advertising because in short, Facebook ads didn’t help them sell cars.
However, as Facebook goes public tomorrow, I can’t help but think back to Google going public in 2004. Google shares opened for $85 with a $23 billion market cap, and today Google shares are trading at $628 with a $205 billion market capitalization.
Whether Facebook’s share price rises or falls, it is simply amazing to think that just nine years ago, a kid in his dorm room coded a website that is now quickly approaching 1 billion unique users and is worth over $100 billion dollars.
As long as Facebook continues to innovate and prioritize their users’ experience over everything else, I don’t see Facebook slowing down anytime soon.
Do you think Facebook is a good investment?
Be sure to “share” this tonight because tomorrow your Facebook “shares” will cost you $38 each!
eBoost Consulting helps great companies grow through search and social paid advertising. Since 2005 our team of digital marketing experts has been running highly successful digital marketing campaigns with a focus on innovation, results and customer satisfaction.