Facebook Going Public at Peak Valuation: NIA

Since 2004 Facebook has steadily achieved compound annual user growth of 191%. They are currently valued at 100 Billion USD. They are currently planning to go public trading shares in May. The National Inflation Association has filed reports stating that this move to go public is very risky, "The American public needs to realize that Facebook at a valuation of $100 billion has far more downside risk than upside potential.". Facebook's growth will continue to decline over the next few years while the overall social networking industry will grow by 61%. The NIA fears the same end result of MySpace will happen with Facebook. Their reasons are that the Price/Sales ration and Price/Earnings ratio are to high of a premium. Ways stated to help with this premium and continued market penetration is to expand in Europe and more importantly into China. However Chinese officials have blocked access to Facebook.

We are finding there are many risks and rewards associatied with Facebook's plans to go public. I hope to continue to follow this story as it develops.

-BW

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