Are you tired of debating about Facebook’s stock price? The best way to cut investors short is to ask: Will Facebook be worth $1 trillion?
Here’s why: Top technology companies like Google and Microsoft are worth 10 times the valuation at which they went public. Companies that increase in value like this are called “ten baggers” in investment terminology.
Asking if Facebook could be a ten bagger is the quickest way for laymen and long term investors alike to evaluate the potential of the social network’s stock, Evercore Partners Senior Managing Director Paul Deninger said at the Intel Capital Global Summit in Huntington Beach, Calif.
Facebook went public at a valuation of roughly $100 billion, meaning that the company would need to be worth$ 1 trillion in order to join the list of the greatest technology investments of all-time.
Here are some examples of the increased stock values of top U.S. technology companies, based on their IPO market capitalization and their market capitalization as determined by today’s stock price:
- Google: $23 billion at IPO, $249 billion today.
- Apple: $1.8 billion at IPO, $625 billion today.
- Microsoft: $778 million at IPO, $250 billion today.
- eBay: $1.9 billion at IPO, $62.4 billion today.
- Yahoo: $848 million at IPO, $19 billion today.
Readers: Do you think Facebook could join the ranks of the best technology stocks ever? What about if you bought stock at today’s valuation (about $22 per share, for a market capitalization of $47 billion)?
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