Behold The Bear On Facebook

NeXt Up Research values Facebook at $13.2 billion to $13.9 billion, or $5.84 to $6.12 per share of common stock, close to a third of other recent estimates.

SharesPost, one of two venues where departing employees can unwind shares of nonpublic companies, currently lists a $36.2 billion value for Facebook, but that figure doesn’t reflect the most recent transaction nor the latest estimate. The company may have a bit more than a third of that value, according to a NeXtUp Research report.

The $36.2 billion figure has informed most of the valuations of Facebook recently cited by pundits in recent months. Everyone aptly calls it an estimate, but maybe a better word is abstraction.

SharesPost publicist, Britt Gottleib of Schwartz Communications, clarified via email that the $36.2 billion figure “is calculated by combining the available data from recent transaction prices, current posts, research estimates and recent last round of venture financing valuations. The values are meant only to provide a convenient, single reference point from multiple sources of information relevant to a company’s value.”

A report by NeXtUp Research dated this October 31 says that the latest sale of Facebook holdings on SharesPost was an October 19 flip at $25 per share, which would have implied a value of almost $56.7 billion. This occurred a couple of weeks after a spokesperson for the social network told Reuters a five-for-one stock split was underway. Facebook previously did two other splits: a four-for-one in October, 2007 and a four-for-one in July, 2006.

A NeXt Up Research report focusing only on Facebook, dated October 4, values the company at $13.2 billion to $13.9 billion, dramatically lower than other recent estimates. The NeXt Up valuation assumes that there are about 2.26 billion shares outstanding, pricing at $5.84 to $6.12 per share of common stock.

Among other rationale for the comparatively cynical valuation by NeXt Up, the research company states that the number of users in lucrative economies may reach a peak within the next few years, and that Facebook will have difficulty penetrating emerging markets. About two thirds of Internet users in the U.S. and Europe already use Facebook, so that mostly leaves emerging markets for future growth.

Brazil, Russia, India and China together have 45 percent of the world population, but Facebook only ranks in the top three social networks in two of the four, India and Brazil. China — not including Hong Kong — continues to block Facebook.

For 2010, we estimate that the entire SNS market will generate more $6B in revenues, of which approximately $3.5 billion will be generated by Asian SNS such as Xiaonei, QQ, and CyWorld. Facebook’s market share will be 20%. If another competitor can provide an alternative platform to Facebook there is possibility that social gaming companies and advertisers will switch loyalties.

The NeXt Up report also states that additional growth in users challenges the Facebook platform:

Facebook has more than doubled its unique visitors from December 2008 to December 2009. Facebook Connect has grown to reach more than 100 million users and is available on more than 1 million websites. Such widespreadadoption has lead to challenges in maintaining platform reliability. Facebook’s platform recently faced some uptime issues. As the case with Friendster shows, a large number of users can placea significant strain on infrastructure resources, with possible impact on user experience.

That kind of bearishness, combined with the fact that Facebook continues to have pending legal challenges from the Winklevoss twins regarding the company’s value, together make a very strong case for keeping the social network private for a long time. On the other hand, if the social network has a documented $13.2 billion to $13.9 billion worth — as opposed to the $36 billion forming the basis of the latest suit by the founders of ConnectU — that could prompt a judge to dismiss the case, clearing a hurdle for potentially going public.