On Friday, the most exciting initial public offering EVER is scheduled to take place. In case you’ve been locked in Al Capone’s vault and missed the news, Facebook is going public.
The IPO is planned to go off between $35 – $38 per share. At the high end, this values the enterprise at around $104 billion. Instantly, the blue-framed website that gives everyone a podium from which to spew “interesting” commentary will be the 9th largest technology company in the world.
Now let’s take a minute to compare IPO Facebook with Apple. Apple had 2011 revenues of $108.25 Billion. Facebook’s 2011 revenues weighed in at $3.7 Billion. Apple closed today with a market cap of $511 billion. As I mentioned above, IPO Facebook will launch with a likely market cap of $104 Billion.
So… Facebook, with revenues that are 3.4% of Apple’s will have a market cap slightly larger than 20% of Apple’s. With any kind of an opening day trading pop, it’s not inconceivable that Facebook ends the day being worth 1/3 of Apple. Oh yeah. Apple also has over $100 billion in cash. Facebook has about $15 Billion.
What does that all mean from an investment perspective?
I’m not really sure. I’ve been kind of busy hitting the “Like” button on videos of dogs on unicycles, changing my profile picture, sending out Friend Requests and working on Farmville. There are only so many hours in the day.