Is This the Next $100 Billion Stock?

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Investing decisions are made from a mosaic of data, yet synthesizing what matters can be tough. Enter the Fool poll. We show you the Big Headlines, you tell us what's factoring into your investing decisions and help your fellow Fools in the process.

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 (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.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1507049, ~/Articles/ArticleHandler.aspx, 10/22/2016 5:35:56 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 20 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes