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Tuck School of Business at Dartmouth professor Anant Sundaram weighs in on Facebook's market performance.
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All right let's -- about FaceBook shares of FaceBook hitting an all time -- today with trading volume blowing away its daily average -- comes as FaceBook insight as to getting.
That first opportunity to sell the stock although you know I would give my next guest is an expert in the company valuations.
Month.
-- -- is a professor at the tuck school of business adopt -- on thank you so much for joining as I mean.
Are you surprised we'll get to the unlocking of shares today in a minute but I just surprise of the decline of the FaceBook because stock since the IPO.
Not at all.
I think it's fairly obvious given the fundamentals and what needed to be achieved that with the -- dollar -- price seemed a tad on the -- beside.
That's that it does modern family's -- job I guess to get FaceBook the maximum possible amount of proceeds.
But I think go where we at today's probably not -- they're recognizing that I'm not an analyst covering the stock but probably closer to where the truth this.
Given the nature of the business and the risks involved in the kind of growth that is achievable.
I'm interest sit like some of the big institutional.
Investors -- at Goldman Sachs probably got the stock at about the price it is now would they be.
Tempted to sell because they don't know -- to sell another -- to these shares in November.
And the fear -- I guess would be to release the shares now put more downward pressure on the price which would let them in November.
It an extremely tough tradeoff on that is precisely the kind of you know liquidity is -- liquidity Obama looking for some kind of a valuation signal.
In these cells is something that the investors will be looking fall and -- -- the Goldman Sachs of the world that have bought an app the roughly the price at which it is trading today.
It is an extremely difficult decision because one would also assume that liquidity need to -- -- But my guess would be if somebody's got bought it close to where it's trading today where it to get -- of significant chunks of that.
That will have a potentially negative impact on the market how much lower couldn't go do you think on on.
All of that is impossible -- credit got you in the vagaries of the market.
-- -- -- -- -- And everybody got the thing that I can say is based on very careful fundamental analysis which I've.
Done that over time in -- have repeatedly as information comes in at feet and my model and on the subject to.
And conditional on certain assumptions and -- -- Well service -- this seems like a reasonable fundamental value for the company.
That said that gosh you know as.
And nobody predicted as dramatic swing to the mobile's world that we've seen in the last few -- -- -- advertising that does everybody's been talking -- have been extremely tough.
So and so far the downside as possible but it's impossible to say so.
Please don't hold me through it okay we wanna do that I promise I look we've only -- one earnings report since the IPO there's still a lot of clarity that's missing with this company.
What does -- have to do to convince investors that it is a viable entity.
I think.
That the -- there -- -- viable entity my goodness I'm and that probably gonna end the year wed probably know 67 billion in revenue sell my house something in that range and very substantial earnings.
The Bible that we have been problem the question is is the viability pro and enough to justify a fifty billion dollar market cap which is kinda where -- -- loudly and -- that's the growth will have to be substantially process and I think the market would be looking not so much fall specific numbers as much trends -- to a specific things.
One.
Though -- ability to monetize them mobile's viewership and be.
-- it does have a good look at the revenue -- non US use it is substantially.
In low.
And I think people might be looking for some improvement in that in the next couple of quarters before making no real sort of judgement one real the other is absolutely all right thank you so much professor an -- and are only really appreciate your comments today thank you for joining us.
He -- he uses it to the tune in to written bottom line all right and your fault.
