Mark Hulbert Gets Medieval on Facebook's Valuation

In case you missed it, this week Mark Hulbert added insult to injury when he came out and was like “Who cares about the post-mortem of what happened with the Facebook IPO, let’s focus on what it’s actually worth now.”

And the number he comes up with is $13, LOLOLOLOL.

But he’s using IPO math, not the “cash flow assumption” bullshit you’ll find in a sell-side buy rec…

From MarketWatch:

Courtesy of a just-released study, calculating a fair price for Facebook’s stock isn’t as difficult as it might otherwise seem.

The study is entitled “Post-IPO Employment and Revenue Growth for U.S. IPOs, June 1996–2010.” Its authors are Jay Ritter, a finance professor at the University of Florida, and two researchers at the University of California, Davis: Martin Kenney, a professor in the Department of Human and Community Development, and Donald Patton, a research associate in that same department.

The researchers found that the revenue of the average company going public in the period analyzed in the study grew by 212% over the five years after its IPO (excluding spinoffs and buyouts). Assuming Facebook’s revenue grows just as fast, and given that the company’s latest-year revenue was $3.71 billion, its annual revenue in five years’ time will be $11.58 billion.

Get over there for the whole delineation…

Source:

Facebook’s Stock Should Trade for 13.80 (MarketWatch)