Aftermath of the Facebook IPO: Now that a bit of time has passed since the IPO and passions regarding the offering have cooled somewhat, interesting post-mortems on the offering are beginning to appear:
Felix Salmon: Facebook’s SecondMarket Muppets
Aswath Damodaran, Professor of Finance at the Stern School of Business, New York University: Facebook: Sowing the Wind, Reaping the Whirlwind In Professor Damodaran’s view, “[m]uch of the chatter about whether Facebook was a good buy or not was framed in terms of pricing, with the optimists arguing that it was a bargain because you were paying less per user than you were at other social media companies and the pessimists arguing that it was expensive because it was trading at a much higher multiple of earnings or revenues than Google or Apple. Any attempt at full-fledged valuation, where you confronted the uncertainty and attempted to make estimates, was viewed as an exercise in speculation and guesswork. I also think that this is why the conspiracy theories, where Morgan Stanley fed inside information about future growth to institutional investors prior to the IPO and where the poor retail investors were the last ones to know, are misplaced. I am convinced that the growth rate and the prospects of the company were never key drivers in how this stock was priced and that if there is a story here, it is one of ineptitude and arrogance, rather than malice.”
Also by Professor Damodaran, his pre-IPO thoughts on the valuation of Facebook:
Facebook and ‘Field of Dreams’: Hoodies, Hubris and Hoopla
The IPO of the decade? My valuation of Facebook
Facebook: Playing the “IPO pop” game?