Description:Â Â As the fateful day of Facebookâ€™s initial public offering draws closer, the giant social networkâ€™s financial results are attracting more attention. And while its recently updated securities filing shows some blockbuster numbersâ€”including a mind-boggling 900 million active users, half a billion of whom use the site dailyâ€”it also reveals some potential red flags, including rapidly rising costs for marketing and other expenses. All of this raises the question that investors will need to answer before too long: Is Facebook unlike anything we have seen before, or is it just another modestly profitable Web business?
Questions for discussion:
- What are the concerns related to the valuation placed on Facebook?
- How would you go about financially analyzing Facebook?
- What value would you place on the firm today?