Facebook (FB) IPO Preview by TechStockProspector


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									Robert DeFrancesco’s
May 14, 2012

Facebook (FB) IPO Preview

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Get ready for the Facebook (FB) IPO. Pricing is scheduled for Thursday. And the
opening day promises to bring fireworks.

A few Wall Street analysts have already issued fair-value targets for Facebook
shares in the low-to-mid $40s. The opening price range is estimated at $28 to $35.

Recall last May when LinkedIn (LNKD, $108) went public at $45 a share and
opened for trading at $83. The stock, which traded up to $122.70, finished the day at
$94.25, up 109% from the IPO price.

Despite all the hoopla, investors should not chase Facebook shares because the
valuation at the high end of the expected opening range is already 25X 2011
revenue. The company faces slowing growth for key metrics and the transition to
more mobile users promises to be disruptive at least over the short term when it
comes to selling advertising.

Here are some of the key Facebook stats:

*Estimated IPO price range: $28 to $35
*Estimated initial value: $77 billion to $96 billion
*Amount to be raised (high end): $11.8 billion

*Monthly active users: 901 million, +33% y/y
*Daily active users: 526 million, +41% y/y
*Mobile monthly active users: 488 million, +69% y/y

*Q1 revenue: $1.06 billion +45%
*Q1 worldwide ARPU: $1.21, +6% y/y
*Q1 North American revenue: 50% of total revenue

($mil)          2007          2008            2009            2010             2011
Total           $153          $272            $777            $1,974           $3,711

Monthly active users (regional breakdown)
North America: 21%
Europe: 27%
Asia: 25%
Rest of World: 27%

Follow Rob on Twitter: @TechStockRadar


The May 2012 issue of Tech-Stock Prospector is available at
TechStockProspector.com (subscription required), in the Amazon Kindle store (this
includes the Kindle for iPad/iPhone reading app) and on the Barnes & Noble NOOK

Here are some of the topics covered in the May 2012 issue:

*The next growth phase for Apple
*Cloud-software earnings shine
*NetSuite gains enterprise traction
*Ultimate Software partners with Yammer
*Accelerating growth at Concur Technologies
*A top growth play in networking security
*Ariba arrives again
*Competition heats up between Qlik & Tibco
*Zynga proves tough to value
*F5 Networks builds momentum in wireless
*4 positive catalysts for Intel
*Acme Packet hopes for a second-half recovery
*Fusion-IO speeds up the datacenter
*There’s value in the desktop at Citrix Systems
*Splunk knows its way around machine data
*TSP Deal Report: Constant Contact

To place an order, call TSP Customer Support at 800-392-0998 or visit

Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for
iPad/iPhone reading app.

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Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20
years of experience covering the tech sector. He is a former senior writer with
Louis Rukeyser’s Wall Street.

TechStockProspector.com, launched in 2003, is an investment-research service
focused primarily on the networking, storage, security, wireless and software
sectors. Annual subscription: $350.

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