WhatsApp Facebook’s Deal

 Last weekend I have been reading lot of literature and news about the deal between Facebook and Whatsapp. Most of the people bloghave challenged it on the Value and Pricing Perspectives. Have taken some extracted thoughts from prof Aswath Damodaran and they looks very interesting:

Following in the footsteps of my favorite baseball general manager, Billy Beane, its time to play some Moneyball, where we let the data drive our actions, rather than our intellects. Here is what I take out of these numbers:

  1. If you are an investor, stop trying to explain price movements on social media companies, using traditional metrics – revenues, operating margins and risk. You will only drive yourself into frenzy. Continue reading “WhatsApp Facebook’s Deal”

Market Efficiency and Facebook

Wow  Facebook Inc. is all set for its initial public offering price range of between the high-$20s to the mid-$30s per share, The Wall Street Journal reported Thursday, citing unnamed sources. The social media company also seeks a valuation of $85 billion to $95 billion.

The above head line encourages me to write on the controversial topic  Market Efficiency. Capital markets are markets for trading in long-term financial instruments. Capital markets have two main functions: as primary market they provide the means whereby long-term funds can be raised; as secondary markets they provide the investors to sell Continue reading “Market Efficiency and Facebook”