Read the case study on facebook and answer questions from the case.
How does Facebook make money? What are the sources of revenues for Facebook? What are the value drivers of its business? What is the outlook for sales over the coming years? What is its comparative advantage relative to other social networking companies? (A SWOT analysis would help answering this question)
- Why is Facebook going public? What is the planned use of proceeds from the offering?
- What was going on in the US IPO markets prior to Facebook’s offering? What has been the performance of recent IPOs?
- What is the intrinsic value of a Facebook share? How does this valuation compare to the price talk from the underwriters? (You can use the valuation analyses in the case –Exhibits 11 and 12 – to answer this question)
- As a potential shareholder, what are your concerns about Facebook or its stock offering?
- What is your recommendation for the CXTechnology Fund?