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Forget $65 billion. When Facebook finally goes public in next year's first quarter, it'll command a $100 billion valuation, CNBC reported yesterday. Yep, you read that right. This isn't an April Fool's joke.
Citing unnamed sources familiar with The Social Network's plans, reporter Kate Kelly said Facebook is gearing up for a Q1 2012 IPO to get in front of public-company reporting requirements that could kick in by next April.
We've known for a while that Facebook would have to reveal the details of its business to the SEC once it accumulated more than 500 outside investors. But only the Professor Positives among us would ever have guessed that CEO Mark Zuckerberg would aim for a $100 billion opening valuation, especially in light of the rise and rapid fall of LinkedIn's (Nasdaq: LNKD ) share price.
Internet valuations generally, and social media valuations specifically, have been overly influenced by frothy private-equity exchanges such as SharesPost, where any "Accredited Investor" can bid on a limited supply of hot issues. Social gaming specialist Zynga has traded at an implied valuation of more than $25 billion.
This same enthusiasm has spilled over to the public markets, raising the bar for new social-media darlings such as Renren (Nasdaq: RENN ) and Youku.com (Nasdaq: YOKU ) . Both stocks are down since their debut days, while the S&P has remained within an admittedly volatile trading range.
In other words, Facebook is preparing to plunge headlong into a market that hasn't been kind to new social media issues, at a valuation that even I find unsustainable. And that's saying something. For months, I've been arguing that shares of The Social Network are still cheap. No longer. Not at $100 billion.
Do you agree? Disagree? Please vote in the poll below and then leave a comment to tell us what you think about Facebook's valuation and apparent IPO plans.