Facebook Valuation Alerts!!! (MS, GS, GOOG, GSVC)

Everyone is awaiting an S-1 Filing from Facebook.  It is the talk of the entire financial community and it is going to be one of the most anticipated IPOs ever rather than just in the last decade.  We have heard so many different figure and comparisons that it may be just too much information and the skeptics are going to be all over this even louder than the “Likes.”

Will Morgan Stanley (NYSE: MS) or Goldman Sachs Group Inc. (NYSE: GS) get the underwriting lead?  The comparisons are being made to Google Inc. (NASDAQ: GOOG) relentlessly, as is the valuation spectrum from $75 billion to $80 billion to even $100 billion.  But here is what the big question is… JUST WHAT DOES IT ALL MEAN ON A RELATIVE VALUE BASIS???

Many want to know whether they should buy or sell stock already.  It is too soon to judge because the terms are not going to be telegraphed as of yet.  Dow Jones has made an effort and the figures are not pretty if the $100 billion value comes true:

• If the 2011 revenue was $3.8 billion, Facebook’s price-to-sales ratio would be about 26 versus 8.7-times when Google came public.
• Companies with relatively established revenue streams usually trade around 1-times sales at their IPO.

Here is the real kicker: Facebook’s IPO is called three-times more expensive than Google’s IPO and a whopping 40-times (yes, forty) the average IPO of the last four decades.

Good luck on this one.  Paying $100 billion at an IPO is just too much to stomach at this time without knowing what the inner finances of the company are and what they can grow to in 2013 to 2016.  Getting awarded shares at the IPO is a very different argument than investing in Facebook in the secondary market.

As a reminder, GSV Capital Corporation (NASDAQ: GSVC) is a shareholder of Facebook (and Twitter and others).

JON C. OGG