The Intrinsic Value Of Facebook

The share price of $270,000 was significantly higher because the “fair value” as perceived by the dissenters, which accounted for the chance of an IPO. Taking into account the recently traded Kohler Co. share prices, the book value of a share, and the possibility of an IPO greatly inflated what the perceived value of each share should be. While Kohler believed their voting control and ownership structure would remain the same, the shareholders believed otherwise. Because shareholders assumed Kohler would go public, they argued for a higher valuation so as to receive the highest price, and thus profit, in the buyout.  So based on the highest MVE, we picked Masco as the comparable firm of choice. Using Masco’s MVE, $9838.8, and LTM EBIAT, $437.3, we solved for Masco’s P/E ratio, which was equal to 22.5. By multiplying the P/E ratio by Kohler’s LTM EBIAT (22.5 * $93.76), we projected a market value of $2,109,610,000.  To solve for estimated share price, we divided the projected market value by 7,587.89, the number of shares outstanding to obtain an estimated share price of $278,023.47. This estimate is near the $270,000 per share offer price.

If the company did go public, its share price should be $384.37 for per share with the rapid growth scenario.

A firm’s intrinsic value refers to the true worth of stock in that firm which is calculated on return data and accurate risks. On the other hand, a firm’s current stock price talks about its market price as a whole as perceived by an

Facebook is a very greedy company. The initial public offering or IPO for Facebook was a joke to them because they use it to gain money their personal use, pocketing it. The greed shown is a whole new way of running a company. They made the

Valuation Estimates: Actual Price (6/1/07): $21.63 Trailing P/E $9.57 Forward P/E $7.80 PEG $2.92 P/B $54.00 P/EBITDA $28.24 P/FCF $123.39 EV/EBITDA $3.54 Intrinsic Valuations Discounted Dividend Free Cash Residual Income LR ROE AEG Actual $18.40 $29.71 $3.22 $7.21 $8.79

With evolving technology comes new types of social media, people have begin to question the internet’s effect on our mentality. It is a bit difficult to compare the pros and cons of social media, it has more to do with an individual’s experience.  Some could be having a horrible time due to social media, but others could be thriving off of it.  The more negative implications of using social media could be the way that we share our personal lives and how much of it we give to the public, regardless of social relationships, to consume.  Along with this, we are deeply impacted by what we see from others based on our viewing of what they share because of the ability to create falsified identities and unrealistic interpretations of who we are

Moreover, the company has 8.5 million shares outstanding and the current market price is $24.84 per share. So;

The current enterprise value is $41,335 million and the equity value is $34,455 million. According to yahoo finance, the shares outstanding of our company are 647.31 million, so we can calculate the stock price for next year is $53.23. It will increase in following years.

The management of JetBlue and its underwriters can also price the IPO using valuation multiples. JetBlue can employ the most current comparable data of the most appropriate competitors in terms of value in the airline industry. Valuation multiples that can be employed include, but are not limited to P/E multiples, EBIT multiples, EBITDA multiples. In this scenario, I choose to use Southwest airlines and Ryanair as the major benchmarks, because they are both considered as major low –fare airlines, and are key competitors in the United States and Europe. Nevertheless, I believe the P/E ratio is the stronger valuation tool to determine the true value of a firm. Using this method we come up with a share price of $19.32 for Southwest

The company’s IPO price target was $17 to $19 per share, so the company’s share price continues to trade well above the IPO price. Investors may see a bump in the share price once company insiders and institutional shareholders begin trading their shares.

The first that will be excluded in this evaluation are Company C, E, and F because they are outliers and we will not get back the desired data. Company A, B, D, and G are the companies that will be retained for comparison because of how close the numbers are to Digital Widget. This will help get a more realistic intrinsic value of the shares of Digital Widget, Inc. To estimate the target firm’s market value, the analyst would multiply the target’s metric by the comparable firms’ average market multiple (Brigham & Ehrhardt, 2017). In order to find the intrinsic value of the shares of Digital Widget, Inc. we must find the P/E ratios of the companies in the comparison. Then take the average of the four companies, which came out to 8.976988. Multiplying Digital Widget’s EPS by the average P/E ratios of the four companies being compared is what the intrinsic value will equal. The work is posted

(2) According to the case, proceeds from the offering will be used for working capital and other general corporate purposes. Facebook didn’t say more about the use of proceeds in details.

Facebook has a high valuation of $75-100 billion which is difficult to justify. After the first quarter, the company failed to produce financials which caused stock prices to plummet. This is not good in terms of attracting new investors. In addition, customers often complain of bugs and problems when interacting online

ITT’s value has changed a lot over the recent events. Prior to any offer when ITT’s stock was trading at 43 dollars, the stand-alone value of its equity was 16.4 billion dollars. With the 55-dollar offer to ITT, the company’s value went up to approximately 21 billion. After the offer, the stock was trading at $63.50, which gave the total equity a value of 24.2 billion dollars.

*This will make the intrinsic value of eBay about $59.5 million, should eBay decide to issue the 3.5 million shares. This $59.5 million will be very beneficial for eBay's future growth. (Exhibit 2)