Facebook has set the pricing details for its IPO, valuing itself at c$96b, just short of the $100b figure that has been the topic of discussion for several months now. Our views are completely unchanged from the ones Richard Holway gave in The $100b Facebook Question post in February.
We think that Facebook is a great company. But we fear that the valuation will leave nothing for new shareholders over the medium term. You could perhaps argue that Facebook is worth $50b now - assuming everything works in its favour. But there are obstacles in the way. Social network users are fickle (remember MySpace etal). There is a lot of hungry competition - Google, Microsoft and Apple are powerful competitors who don’t like losing. Then there is the mobile aspect, where Facebook just doesn't seem to have got its advertising act together, plus other issues like corporate governance etc. Considering the many emails we have received on this subject, we are undoubtedly not alone in thinking this way.