If LinkedIn’s Market Cap Is $9.8B, Facebook May Be Worth $80B

So now we know how much LinkedIn is worth in today’s frenzied market for social Internet stocks.

What does this say about online cousin Facebook? It actually offers several valuable data points, and suggests the king of social networking could receive a market cap ranging from $50 billion to $80 billion as a public company.

Following are my calculations using per revenue and per user formulas. But first some quick context. I don’t need to remind you that Facebook’s valuation has been the subject of rampant speculation for months.

When Goldman Sachs invested $500 million in the company in January, the inference was that Facebook deserved a market cap of $50 billion. That estimate rose to $52 billion when a month later Kleiner Perkins Caufield & Byers put $38 million into the company.

General Atlantic put more chips on the table in March when it reportedly purchased about 2.5 million shares of the company at a $65 billion valuation. All the while, online secondary market place SharesPost has been offering its own signals. Recent transactions at $32 a share suggest a value close to $80 billion.

Seems like all these inputs were offering useful data.

That’s because LinkedIn sets a bar of similar height. The popular social network for business professionals floated shares Thursday morning that quickly surged from a $45 offering price. By late afternoon, they were trading close to $100, giving the company a market capitalization of $9.8 billion.

With sales of $243 million last year, LinkedIn has a price-to-sales ratio of about 40x (find data in SEC docs here). Facebook is estimated to have had sales of $2 billion last year. So a similar 40x ratio would suggest a market capitalization of just over $80 billion.

A slightly less elevated way to get at a market capitalization is to look at a per-user comparison. LinkedIn has more than 100 million users, and therefore a value-per-user of about $98. Apply this metric to Facebook, with more than 500 million users, and the company’s value comes to $49 billion.

Obviously these estimates are guesstimates. When Facebook begins to trade, anything could happen.

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