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Facebook Incorporation
Introduction
The entire market is waiting for the emergence of
Facebook as a publicly traded company, said Jonathan
McNeil, Lead analyst at CXT Technology Fund.
Basically Facebook is an online social networking
service founded by Mark Zuckerberg and his
roommates. Facebook held its initial public offering (IPO)
on Friday, May 18, 2012. The IPO was one of the biggest
in technology, and the biggest in Internet history, with a
peak market capitalization of over $104 billion. Media
exparts called it a "cultural touchstone
Active Users
Revenue
2004
1 million
$ 382,000
2005
6 million
$ 9 million
2006
12 million
$ 272 million
2007
58 million
$ 153 million
2008
145 million
$ 272 million
2009
360 million
$ 777 million
2010
608 million
$ 1,974 million
2011
845 million
$ 3,711 million
Statement of Problem
Facebook is an online social networking service
and a new company in stock exchange. The
problem is to make decision whether to invest or
not to invest in Facebooks IPO considering the
impact of dot-com bubble of 1990s.
Pricing of Shares
Evaluation
Evaluation proceeds by using the perception of Damodarans Assumption
Forcasting of Cost of Capital
Competitive Threats.
Recommendation
CXTs investment committee is still confused
whether they should invest on Facebooks IPO
or not. However, I believe Facebook has more
opportunities to grow. They should invest on
Facebooks IPO although there are some
competitive threats. In my point of view
competitive threat can be overcome as there are
lot of people are still to come to the Facebook
network.
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