Facebook paves way for IPO, will it be as overpriced as Google?

Analysts are saying that facebook, the popular social media website that boasts more than 300 million active users daily, could go public with a very nice IPO.

It looks like Mark Zuckerberg and co. are following another succesful historic IPOs lead and offering dual-class stock structure. The reason for this could be to issue class B stocks, and A stocks to key members to control the shareholder voting process and in effect, control the way that the company is run after an IPO.

This makes sense to me, considering that Zuckerberg originally turned down a sale to Google as well as Yahoo.

So the real question is, what will the original stock price be, if they are trying to mimick Google, will they be as overvalued as Google?

As I’ve mentioned to my father, and other likeminded stock aficionados, market over valuation with high tech companies is pretty much par for the course, as it’s more difficult to value a company based solely on the fact that they have a website.

Yes, Google is probably overvalued. But look at what industries they are in, and the ad revenue alone that they bring in. Google alone brings in around 45 times more ad revenue than traditional media outlets…. combined. COMBINED!!

And if you want to compare facebook to Google, I don’t think that there’s many more comparisons out there besides two others.

1) facebook’s programming has gone open source, and is running a host of applications, sites, etc. that continue to feed into the facebook users.

2) facebook’s permutation into EVERYWHERE and EVERYTHING in a short time period. With the advent of pages, fan pages, clubs, etc. businesses are seeing the value in harnessing the power of ‘the book’.

So I think the comparisons aside, I don’t see how Facebook’s initial IPO when it happens, won’t be anything but over inflated. That being said, it fits with the rest of the IPOs that historically happen in this space.

Facebook paves way for IPO – CNN.com.