Facebook has accumulated an unprecedented 845 million users representing 12.07% of the entire world's population.
But does that merit an offering worth as much as $100 billion?
There are 7 billion people on the planet today, 5.15 billion of whom live on $10 or less a day. Of that group, roughly 3 billion people live on less than $2.50 a day.
That means if you remove those who live on less than $10 a day because they theoretically can't afford a computer or a phone or don't have enough disposable income to be monetized, that leaves roughly 1.85 billion potential Facebook users.
In a perfect world where a company could capture 100% of its target market, that would cap Facebook's potential user growth at 118.93%.
But we don't live in perfect world. As far as I know, no company has ever captured 100% of its target market. Not once ever.
And another thing, Microsoft was traded at a split and dividend-adjusted price of $0.08 on March 13, 1996. As of January 30, 2012, the stock was trading at $29.61, which means Microsoft stock has delivered a mouthwatering 36,913% return over the last 16 years.
For Facebook to deliver similar returns at its proposed $100 billion valuation, Facebook's market cap would have to increase to $36.21 trillion.
That's roughly 57.47% of the entire world's GDP.Possible?????
Time is money, so money is time. Money saved is time gained in reverse! Money stores your life’s energy. You expend your energy, get paid money, and store that money for a future purchase made in a currency.