What Price Facebook?

Apparently Facebook knew its $15bn valuation was bollocks at the time (not that they told anyone of course...)

Facebook Inc. quickly concluded it wasn't worth anywhere near the $15 billion market value implied in a 2007 investment made by Microsoft Corp., according to confidential information obtained Wednesday from court documents.

In a transcript of a June court hearing that was closed to the public, lawyers arguing over a legal settlement revealed Facebook's own appraisal had priced its privately held stock at $8.88 per share, giving it a market value of about $3.7 billion.

This is a "we told you so" smart alec post - 18 months ago (at the time of the MSFT investment) we valued it at c $ 1.5 - 2 bn, with c 100m users. Its grown since to c 150m users so we would value it at closer to c $2.5 - 3bn today.

There is a reason for this "I told you so" post - it was fairly easy, with publicly available data, to calculate roughly the correct value at the time - yet most pundits swallowed $15bn unthinkingly. The lesson is that by merely looking dispassionately at the facts and ignoring the hypewave, it is usually possible to discern reality.