Reuters exclusive: Facebook investors can't find buyers, look for exits

[Newsjock]

Source: Reuters

A group of Facebook shareholders is seeking to offload $1 billion worth of shares on the secondary market, a sale that would value the company at more than $70 billion, according to five sources with direct knowledge of the situation.

It would represent one of the largest transactions of Facebook shares to date and points to a growing wariness among early-stage investors and employees who fear Facebook's growth cannot keep pace with its market valuation.

The sellers have lowered their price after previously trying to offload shares at a price that valued the company at $90 billion, which would make Facebook more valuable than Time Warner Inc and News Corp combined. But buyers balked.

"At the current valuation where it is, it is really hard to justify the investment," said Sumeet Jain, partner at venture capital firm CMEA Capital, who has examined Facebook deals recently and has taken a pass.

Read more: http://www.reuters.com/article/2011/04/27/us-facebook-shares-idUSTRE73Q8L720110427

[Poll_Blind]

1. Great quote at the very, very end of that article:

"By the time T. Rowe Price is investing," he said, "you know it's too late."

:rofl:

PB

[DCKit]

4. Didn't Goldman Sachs just drop a bundle on Facebook?

Of course, it was OUR money, so I guess they really don't give a shit.

[customerserviceguy]

2. It came from nowhere, it can go back to nowhere just as fast

As soon as all the "free" Internet services start charging, they're going to find out how little most people need them. You can only make so much money selling eyeballs to advertisers, or peoples' relationships and hobbies to marketing firms. Yes, there are fools who buy crap through click-thru ads, but there are only so many of them to go around any more.

Remember how hot MySpace was a few years ago? Nobody cares about it anymore, and when the next Facebook comes around, the current one will go on to the same dustheap. A bunch of speculators will make their bundle finding the last group of suckers to unload this white elephant on. It looks like the current group of holders will be left holding the bag. The Winklevoss twins need to sell quick.

[jmowreader]

3. I was thinking the same thing

That company is NOT worth $70 billion.

And I pity the fool who compares Facebook to Amazon. Amazon is, essentially, a mail order business--what Sears and Wards both started out as. Amazon sells things, they have distribution centers (I have been to the one in the Cincinnati area), they are a company that can be valuated. Facebook sells nothing, and if it doesn't fix its privacy problems it's going to join the long line of irrelevant websites like Altavista, Myspace and...well, you get the idea.