The main purpose of this paper is to examine whether Goldman Sach’s 2011 valuation of Facebook is justifiable based on well-known valuation methods, such as, free cash flow valuation, comparable analysis as well as real option approach. Given that Facebook’s financial information is not publicly available, the valuation of facebook is a challenging task, but worthwhile exercise for social networking valuation that is not explored previously. The intended contribution of this paper is to show various pitfalls behind Goldman Sach’s suggested $50 billion valuation. Facebook is a social networking website that allows users to create a personal profile, share photos, and exchange messages. Founded by Mark Zuckerberg and fellow college mates, Eduardo Saverin, Dustin Moskovitz, and Chris Hughes, Facebook was initially created as a tool to share notes between classmates. Zuckerberg began expanding this... [continues]
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(2012, 06). Facebook Ipo. StudyMode.com. Retrieved 06, 2012, from http://www.studymode.com/essays/Facebook-Ipo-1018087.html
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