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Comment by senthilnayagam | Hacker News Reader

IPO is inevitable but timing is not right, groupon, zynga, LinkedIn, pandora are all trading at very low valuations and so is investor sentiment

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GRPN: 9.5X sales

ZNGA: 6.5X sales

LNKD: 16.2X sales

P: 8.7X sales

S&P 500: 1.3X sales.

It appears that valuations are very high right now. The stocks are down from their peaks—-in other words, investors are not at a record level of optimism about these companies. But a fair assessment is that they've gone from "Wildly optimistic" to "Optimistic."

What's interesting is that even the most aggressive ratio among these companies, the 16.2X, would value Facebook at approximately $60 billion. And yet, the company is expected to offers shares at a valuation of $75-$100 billion.

The reported $3.8 billion in FB revenue is not an official number. It came from a CNBC reporter who cited undisclosed sources. Official revenue would have to be about $6 billion for FB to have the 16x ratio.

Why the downvotes? The parent poster used $3.8 billion to come up with the $60 billion estimate (3.8 * 16.2 is approx 60). Isn't it true that we don't officially know what Facebook's revenue is? I was merely trying to point out that 3.8 may not be an accurate number. Then I went on to say approx how much revenue Facebook would need in order to have a 16x ratio given the current estimated valuation of $100 billion.

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