If Facebook is worth $96 billion then why isn’t Apple worth $2.7 trillion?

“It’s an interesting question: If Facebook is going to be worth $96 billion at its IPO, or 25 times trailing sales, then why isn’t Apple worth $2.7 trillion? The obvious answer is that everyone’s using different metrics to value the two companies,” Tim Worstall writes for Forbes. “At which point the questions become, but yes, should we be using such different metrics?”

The estimation of the two values comes in this Wall Street Journal piece:

“Facebook is significantly overpriced and this is clear by looking at the price of the company relative to either sales or earnings,” says Brian Hamilton, chief executive at Sageworks, a firm that analyses privately-held companies. “Investing in the Facebook IPO may turn out to be a great investment, but right now, the stock is clearly not a bargain.”

But Hamilton maintains Facebook has a valuation problem. He even attempts to put Facebook’s valuation into perspective by comparing it to Apple, the most valuable company by market capitalization in the world. “If Apple, which manufactures tangible products, was valued at a multiple comparable to Facebook, Apple’s market capitalization/value today would be approximately $2.7 trillion,” he says.

Read more in the full article here.

MacDailyNews Take: Here’s another question: Is Facebook the short of the decade?

Related articles:
Facebook founder Mark Zuckerberg’s hoodie upsets analyst – May 9, 2012
Here’s why Google and Facebook might completely disappear in the next 5 years – May 1, 2012
Facebook to join Apple, other tech firms on Nasdaq – April 6, 2012


      1. …P/E RATIO

        Current earning = $1-billion
        Estimate of IPO market cap = $100-billion

        Facebook P/E ratio approx 100

        Amazon (AMZN) P/E is currently 184.3 and Apple (AAPL) is 13.9

      1. I like your creative raw energy BLN.
        Guess the potty patrol team on the loose.

        @3l3c7ro — You do have a choice.

        Thought BLN types with “potty-ness” his/her words express an opinion. More importantly, an opinion based on the article for which this forum allows a certain freedom to make comment.

        Rather then cause friction – make a choice

        – ignore other comments
        – agree or disagree with others
        – make your own comment

        Seems you did neither.

      2. I agree with you to a degree, but then can you be less square and patronizing?
        I don’t like Americans who always have to point out things to grown people when swear words have been used. it’s no fun.

        1. Uhmm… actually. thinking ’bout this.
          As long as MDN’s rules don’t ask to not use foul language, as MDN sometimes like to use foul language in their takes as well, which I find entertaining, may one restrict criticism and patronizing others who feel using foul language? I agree it may be infantile, but it belongs to some person’s properties, and character, and I don’t wanna exclude myself from this, to use foul language, which makes it personal and amable too.
          So, how do we wanna proceed on that in the future?
          If for that, most MGM cartoons and other cult movies and what have you may never have been what they are.
          I am against clean speech and PC.

          Any opinions? MDN care to open a section for discussing this?

      3. @313c7ro

        Your first sentence is not a proper question.

        Thoughts are constructed in the brain, conceptualized and given birth once they are expressed in text. So what do you mean?

        Intelligence, it takes a certain about of intellect to develop a perspective on the given article (though seemly difficult for you) and to express those thoughts in words. A response or comment. Sharing those ideas and expressions takes strength.
        You express a dislike for obscenity or profanity – you have right to that but no right to control others from it.

        Reasons behind the words we say or type. I feel BLN has as much right to post whatever Ballmer likes so long as those words do no cause harm or friction directly to an expressed opinion.

        Yet, your comment is borderline. You seem offended but it is not clear why BLN post personally offences you.

    1. Any time I see your avatar/sitename, I skip to the next post. And I’m NO PRUDE. I’m just tired of your scatalogical references and monosyllabic approach to communication. Grow up. Calm down. Find some maturity, and spare us your fecal verbal foundations.

        1. Actually, priapus (!), I DID skip it until I saw 313c7ro’s comment . . . and then I backed up to post my reaction WITHOUT reading BLN’s infantile post. Try again.

  1. What inquiring minds want to know is, how is FB going to monetize mobile ads?

    Facebook is a platform born on the desktop and is only now attempting to transition to the mobile space, where advertising will be a crucial for its survival. Hence, their own app store and the many advertising trojans that await a mobile audience.

    At the moment, the work in preparation for the IPO, is being undermined by those who see a huge chasm between the bet and the payoff, and they’re trying to let some of the air out of the IPO.

    If true, and FB doesn’t have a clear strategy for mobile advertising and they go forward anyway, all it means is that Wall Street is still shooting from the hip.

    25 times trailing sales? Really!?


      That’s why rumors of the Facebook Phone refuse to die. Story is they’ve done an Amazon and forked and old Android build, much to Google’s frustration.

  2. Amazon, not Facebook, is the short of the century, but who knows when it’ll fall. Could be this year or a few years from now. The market is completely irrational about AMZN (priced at over 100 times earnings), but the stock just keeps going up. They probably have friends in high places (DOJ, banking sector).

  3. Shades of the Great Tech Crash of the late 90s.
    Unfortunately the people who made the mistake of over-inflating tech stock values have retired, died or committed suicide; and now we have a new breed in the financial world who grew up nursing on Blackberrys and don’t lift their heads up from their smart phones. This is a financial disaster waiting to happen. As with the late 90s, they don’t produce anything and have little hard value. This can (and will) change on a dime and Facebook will disappear when a) people get bored with it and it becomes to intrusive on privacy and/or b) when The Next Big Thing takes its place.

  4. How is Instagram “worth” $1 billion?

    Oh thats right Sequoia Capital owns a significant interest in Facebook and Instagram and needed to obtain more pre IPO Facebook stock.

    Nothing more than a game by the venture capitalists and investments banks (like GS) to “make” money.

  5. I would like to think creativity, research and development, engineers and programmers, out sourcing and retail stores – real products to sell — that the entire APPLE umbrella is worth far more then stated. I would start at about 10 trillion.

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