Facebook IPO Overvalued According To Bloomberg’s Investor Poll
Last night, Bloomberg released its results of a poll of 1,253 investors, analysts and traders who are Bloomberg subscribers asking their thoughts on the upcoming Facebook IPO. The results showed that 79% of those polled thought the valuation was too high (Facebook is hoping to raise $96 billion in next week’s IPO).
A big concern is the company’s growth has shown signs of slackening. Sales climbed 88 percent to $3.71 billion last year. According to researcher EMarketer Inc., revenue may increase 64 percent to $6.1 billion this year. That would be the third straight year of slowing growth.
Future growth seems to have some investors worried about the multiple that Facebook will be trading at. Oppenheimer & Co’s, Bob Rich thinks that at the high end of a projected range of $28 to $35 a share, Facebook would be valued at 99 times its earnings, a higher multiple than 99 percent of companies in the Standard & Poor’s 500 Index.
One thing is for sure: investors will be closely watching future earnings reports from Facebook. If they like what they see, it seems that many large investors and funds will be underweighted and may jump aboard for the end of quarter “window dressing”.
Link to Bloomberg’s Global Poll: