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Madness

Thursday 31st January 2008

Sometime last year, Microsoft bought 1.6% of Facebook. They paid $240 million, which puts the value of Facebook at about $15 billion.

$15 billion. For a website.

So, any guesses what Ford, a massive international company with lots of physical assets and a large base of loyal customers, is worth (according to Wall Street)?

Less than $15 billion.

OK, Ford is in dire straits at the moment (name an American car company that isn’t) but even so, thats complete madness.

Posted at 4:11 pm | Posted In: Uncategorized Tagged:

4 Comments:

Lucy

Thursday 31st January 2008, 5:15 pm

“$15 billion. For a website.”

‘Tis bizarre. But then I have never really understood how completely intangible things like websites and stocks and shares are worth money at all. They called our currency the ‘pound’ for a reason – in the good ol’ days, it equated to a pound of gold, and that makes much more sense!

aiusepsi

Thursday 31st January 2008, 11:22 pm

Well, shares are worth something because they are an actual share in the ownership of a company, including all the assets that company posesses.

I heard at one point that M&S was valued based on the price of its stock at less than the value of its stores!

Microsoft has paid over the odds to get hold of a chunk of Facebook, which is why it’s now over-valued. They needed to head off Google, basically. And Microsoft has deep enough pockets to do so.

dickie

Thursday 31st January 2008, 11:56 pm

Yeah I know that, the valuation (and the comparison with other companies) just seemed pretty impressive. I guess MS (or anyone else) wouldnt dream of actually paying that much for Facebook (esp now its traffic is dropping off…).

The M&S thing is kinda weird, but makes sense. The vagaries of the stock market…

Flitterbee

Friday 1st February 2008, 12:04 am

Money is fairly intangible in itself, to be fair. We live in a world of abstract concepts that were we to truly consider the reality of what we assign importance to, it would seem ridiculous.

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