A new study from New York securities firm NYPPEX estimates Facebook’s enterprise value is now much higher than Yahoo and EBay, at $41.2 billion and significantly higher than other fast growing startups like LinkedIn, Twitter, Zynga, and Groupon. Facebook’s value has shot up 56 percent since the middle of 2010.
None of the startups mentioned above have gone public but many let their employees sell shares in private markets as an incentive for their valued staff members. The private markets let investors buy a piece of a company early on but it is difficult to determine what the price of a share should be.
NYPPEX used data from private stock trades made by individuals and institutional investors to estimate the value of Facebook and other privately held social media companies. Because it is difficult to calculate the market value of a private company, NYPPEX calculated an enterprise value. Market value is calculated by multiplying the price of a company’s shares times the outstanding shares. Enterprise value takes into account the claims of all the security holders in company, less cash on hand.
NYPPEX’s study found that, between June 30th and December 1, 2010, the value of 11 privately held social media companies grew by a total of$20 billion or 54 percent, and much of this growth came from Facebook.
NYPPEX calculated an enterprise value of $149 billion for Google and $73.5 million for Amazon. Both Google and Amazon are already publicly traded companies. EBay was valued at $32.8 billion and Yahoo at $18.4 billion. NYPPEX estimates that Groupon’s enterprise value grew at a stunning rate, by 303 percent to reach $3.6 billion. Twitter grew by 131 percent to reach $2.1 billion, while Linkedin and Zinga fell in value by over 8 percent.