The ever increasing value of Facebook

June 29, 2011 11:39 pm 0 comments

Following news earlier this week the  GSV Capital fund purchased 225,000 shares of the social networking giant Facebook. Average cost per share was $29.28 ( £18.29 ) per share or a valuation of about $70 billion (£43 billion). Share prices shot up by around 40% since the purchase, If GSV was to sell 112,000 shares today it would in effect just have been given 113,000 stock worth around $35 billion or £21 billion for free. That’s what I call a very good week at the office.

The new $70 billion valuation represents a 40% increase on the $50 billion Forbes placed on the company in February of this year. At the time Facebook CEO Mark Zuckerberg’s was valued to have a net worth of around $13.5 billion. Zuckerberg estimated worth today is around $18 billion. The rest of the Facebook billionaires including Dustin Moskovitz, Eduardo Saverin, Sean Parker, Peter Thiel and Yuri Milner are all a lot richer too.

Zuckerberg’s rapidly rising fortune is of particular note for other reasons: He now appears to be the 3rd  richest IT Geek in the world behind. Trailing only Microsoft’s  Bill Gates and Oracle’s Larry Ellison. Zuckerberg has already shot past head of Apple  Steve Jobs. The biggest news is probably the news that he has now passed the Google duo, Sergey Brin and Larry Page, with some industry experts making statements like “whose Internet company seems to have stalled.” Google stocks have dropped about 17% since Forbes ranked the Worlds billionaires. The co founders of Google estimated fortunes are now estimated to have dropped to $17 billion, down from $19.8 billion, the estimated figure published in March 2011. Mr Zukerbergs estimated wealth has also passed Steve Ballmer, Microsoft’s head who, according to a chapter in The Facebook Effect, offered to buy Facebook for $15 billion.

Industry experts are now questioning the sustainability of the value and whether this is a bubble about to burst or just get bigger. Some experts predict the company will be floated early next year with a valuation of over $100 billion. Some experts are claiming Facebook is losing some of its appeal, although recent figures show that in the US alone an average of 800 lifetimes a month is spent on site.
One thing is sure in the eyes of investors Facebook seems to be a must invest company and will continue to be so as it continues its monetization of its massive half a billion members.

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