It's finally here. One of the most talked-about companies of the past decade makes one of the most talked-about IPOs in history on Friday, as Facebook finally friends Wall Street. (We're sick of the puns too.)
The chatter, from both supporters and critics, has been endless, but when it involves a company that nearly 1/8 of the human race uses, it just may be justified. Is Facebook's estimated $100 billion valuation just the beginning for the meteoric company or the sign of another doomed tech bubble? Is Mark Zuckerberg, the hoodie-clad so-called "brat tycoon," the model for a 21st century CEO or a cocky kid about to get in way over his head?
No one really knows. Not yet, at least. And that's what makes it so much fun to discuss.
"Like" him or not, there's no denying that Zuckerberg represents one of the most fascinating entrepreneurial stories in modern history. His journey has taken him from a Harvard dorm room to Wall Street boardrooms, and the 28-year-old who stands to make more than $19 billion this week got there by taking a relatively simple concept, refining it and growing it into a global phenomenon. He's changed the way close to a billion people communicate and connect. And he had plenty of opportunity to cash out long ago, but stayed the proverbial course, and remains intent on going public his way.
For many entrepreneurs, an IPO means the ultimate payday. For others, staying private means staying in control. Zuckerberg seems to want both. And for now, with a 57 percent stake in the company he built, he just may get it.
Where does Facebook go from here? We decided to ask some of our friends -- our Board of Directors.
Phil TownInvestor and Author of Rule #1 and Payback Time
"I try to buy wonderful businesses, and I try to buy them on sale. Figuring out what the future holds for Facebook is crucial to knowing how much to pay for a piece of it. You can find the value of a business by adding up the cash the business will earn for the next 20 years. But since you're not going to get the money right away, it's not worth 100 percent. A dollar today is worth a lot more than a dollar you might get in 20 years. The problem with Facebook is that it's such a new business model that no one has any idea what cash the business will earn in the next 20 years. And that's the problem with buying it now -- I don't know what it's worth.
"Is it a wonderful business? It certainly is an exciting, world-altering revolutionary business. That's pretty wonderful. But wonderful also means it's going to be around for 20 years, that it is durable, which means it has some sort of defendable niche that can keep competition at bay. I have no idea what 'social networking' will be doing in 20 years.
"Since no one knows what Facebook will be making in the next five years, much less the next 20 -- or even if it will be around then -- it's impossible to know what the actual value is. If you don't know what it's worth, buying it is just pure speculation. For Facebook, I'm out."
Bob ParsonsFounder and Executive Chairman, The Go Daddy Group
"I know many critics are questioning Facebook for its advertising model, its privacy issues and so on, but I will say this -- from what I can tell, Mark Zuckerberg, although he is going to do very well, is not in it for the money. I think that bodes very well for the future of Facebook."
Clint GreenleafFounder and CEO, Greenleaf Book Group
"Facebook looks like a great stock today. MySpace was the top social platform just a few years ago and now it's a joke. It's crazy to assume that in this modern world a company like Facebook could be a good long-term hold. If you're in it just for a quick day-trading play, have at it, but I'd stay away if you're looking for a long-term investment."
Tate ChalkFounder and CEO, Nfinity
"In the short term, mounds of cash. In the medium term, lots of adjusting the business model to outside forces, like trying to raise stakeholder value. In the long term, exactly where it is today -- unless someone can figure out how to truly monetize social media."
Warren BrownFounder, CakeLove and Love Cafe
"Facebook is going to reap in loads of cash. Following the stimulus that comes from the newly minted zillionaires will be a good study for the future. Maybe it'll balance out the fallout from Greece and Spain?"
Lawrence GelburdLecturer, The Wharton School
"Facebook will be very successful -- as long as management continues to take the big risks."
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