bbtmn: Madness

Madness

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 by dickie @ 1/31/2008 04:11:00 PM.

4 Comments...

Lucy: "$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!
posted @ Thu Jan 31, 05:15:00 PM GMT

aiusepsi: 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.
posted @ Thu Jan 31, 11:22:00 PM GMT

dickie: 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...
posted @ Thu Jan 31, 11:56:00 PM GMT

Flitterbee: 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.
posted @ Fri Feb 01, 12:04:00 AM GMT