Technology

10:14am

Wed May 16, 2012
Planet Money

How Facebook Can Live Up To The Hype

Lam Thuy Vo / NPR

Facebook will be valued at about $100 billion when it goes public this week. What would it take for that valuation to be justified?

As we noted yesterday, the value of a typical big, public company is 15 times the company's annual profit. So a company valued at $30 billion would typically have annual profits of $2 billion.

Facebook will be valued at 100 times its current annual profits. That's because investors expect the company's profits to go through the roof in the coming years.

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5:43am

Wed May 16, 2012
The Two-Way

Folks Seem To Like It, So Facebook Boosts Size Of Stock Offering By 25 Percent

Originally published on Wed May 16, 2012 6:20 am

Paul Sakuma AP

The hoopla continues over Facebook's initial public offering of stock, with word that the social media giant has increased the size of Friday's IPO by 25 percent.

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4:35pm

Tue May 15, 2012
The Two-Way

Report: GM Will No Longer Buy Ads On Facebook

The Facebook thumb.
Paul Sakuma AP

According to The Wall Street Journal and CBS News, General Motors is planning to pull its ads from Facebook.

That would be a big move because GM has spent about $10 million in Facebook ads and the news comes just days before Facebook goes public on Friday.

The Journal reports:

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2:01pm

Tue May 15, 2012
Planet Money

Is Facebook Worth $100 Billion?

Originally published on Thu May 17, 2012 10:56 am

Paul Sakuma AP

When Facebook goes public this week, the company will be valued at roughly $100 billion.

It will be the highest valuation ever for an initial public offering of a tech company. Is Facebook really worth this much money?

One way to frame the question is to consider a single fraction.

The number on top of the fraction is the total value of the company. The number on the bottom is the company's profits over the past year. This fraction is called the price-to-earnings ratio. It's widely used by investors in stocks.

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6:00am

Tue May 15, 2012
The Two-Way

Facebook Ups Its Forecast: Says Shares Will Sell For $34 To $38

Raul Arboleda AFP/Getty Images

Strong demand for its first public sale of stock has led Facebook to raise its forecast for how much each share will sell for when the company goes public on Friday.

"We anticipate that the initial public offering price will be between $34.00 and $38.00 per share," the company says in a statement filed earlier today with the Securities and Exchange Commission.

Earlier, the social medial giant had expected shares would sell for $28 to $35 each.

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