Facebook IPO – Expecting Way too Much?

Facebook is going to allow people to invest in the privately owned company for the very first time, but some people are saying that Facebook should not be valued so high. Facebook is trying to receive $96 billion big ones in their IPO offering next week, but according to polls, people are saying that Facebook is simply expecting way too much. There have been concerns lately that Facebook growth is going to hit a wall soon and begin to steady, so this leaves investors saying that $96 is just way to high of a value to expect.

Facebook undoubtedly has a great strategy and their tools have helped gain the 900 million active users that are currently on the site. It cannot be argued that Facebook has a great strategy that they have implemented. However, it is being said that it is unlikely that Facebook is going to be able to gain a slew of new users by implementing new tools that can compete with other people social media websites. It seems like Facebook isn’t going to be able to get much bigger than it already is.

Undoubtedly, the Facebook stock is going to come out and then it is going to go right to the top. It is definitely going to be popular, but a lot of people are thinking that a lot of people are going to be highly disappointed. As a matter of fact, one person went on the record saying that there is no way he would allow his clients’ money to go anywhere near this stock.

Facebook IPO -- Expecting Way too Much

Facebook IPO -- Expecting Way too Much

In a survey that was conducted by Bloomberg, only 7% of people said that Facebook has a value that they considered to be properly valued and 3% of those people surveyed said that they actually thought Facebook was undervalued. Other than that, 11% of people that participated in the poll said that they had no clue as to how Facebook should be valued.

Facebook has actually begun to show signs of slowing down as far as growth is concerned. Sales were able to climb up by 88% as of last year to $3.71 billion. According to researchers, it has estimated that revenue may have an increase by 64% this year, going up to $6.1 billion. That may sound good, but it will make the third year that there has been a slowing as far as growth is concerned.

Sherly Sandberg and the other executives at Facebook are currently traveling all over the country, meeting up with possible investors and pitching the new IPO. These executives have went on record saying that they still believe in the growth of their company and that mobile advertising is definitely looking very promising. In March, it has been reported that 488 million of the people that access the Facebook websites did so via a mobile device.

Either way, it is looking like Facebook could be a rather risky investment and can be considered over valued at this point. Let’s just hope that too many don’t get burned on this deal.

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