Facebook - facing facts

The second quarter earnings report is out, Q2 2011 vs 2012 quarter revenue growth is 28%. While that's impressive, its not nearly impressive enough for an On-Track-for-a-$100bn valuation. To really persuade people it is a $100bn company in embryo, the growth in the user base has to be higher and ARPU must grow - but ARPU has remained about the same - so the stock price has tanked to c $26 at close (and down to below $25 on after-market trading) , giving around a $60bn valuation (And that is still high in my view on current performance*).

As we have said in the past, to get that valuation things have to go spectaculalrly well.

Most interesting thing in my opinion is the huge CAPEX spend - nearly $1bn in the first half of 2012, equal to the total CAPEX in 2011- what ARE they up to?

*The thing that amazes me most about the Facebook share price in the last 3 months is the climb up to $32 before the all-too-predictable precipitous decline. There is clearly more than one born every minute.